Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Tex.: Third party IT service provider unable to show relevant market in counterclaims, (Oct 10, 2025)

By Donielle Tigay Stutland, J.D.

Alleged software and IT services relevant markets were insufficiently pleaded.

The federal district court in Dallas, Texas dismissed antitrust counterclaims brought by Infosys Limited (“Infosys”) against Cognizant Technology Solutions Corp. and Cognizant Trizetto Software Group Inc. (“CTS”). The court determined that Infosys failed to define a legally sufficient relevant market in its antitrust counterclaims. The court did grant Infosys leave to amend its complaint (Cognizant Trizetto Software Group, Inc. v. Infosys Ltd., No. 3:24-cv-02158-X (N.D. Tex. Oct. 9, 2025)).

Background. TriZetto was a software company offering healthcare companies software for processing healthcare insurance claims, and CTS provides IT services that use such software solutions. TriZetto’s two most used software solutions are Facets and QNXT. CTS purchased TriZetto (collectively becoming “Cognizant”) and became “vertically integrated,” offering payors two essential services: claims processing software and IT support for that software.

Licensees of Cognizant’s software often turn to third party IT servicers, such as Infosys Limited ("Infosys"), to maintain and support their systems. Cognizant requires such third-party servicers to sign non-disclosure agreements (NDAAs).

Infosys alleged that they were a key partner to TriZetto before their merging with CTS and helped develop QNXT. Infosys alleged that post-acquisition Cognizant leveraged its power to undermine competition for healthcare payor software and related IT services using its dominant position in both markets. Infosys alleged that Cognizant engaged in a “systematic campaign to erect new barriers to entry through more onerous NDAA provisions” was a response to Infosys’ rise in the market.

Infosys began developing Helix, which, according to them, was an innovative and technologically superior alternative to Cognizant’s outdated Facets and QNXT. According to Cognizant, Infosys violated the NDAA agreements, misappropriated Cognizant’s trade secrets, and stole its confidential information, all in an effort by Infosys to develop or enhance its own competing software and service offerings, the Helix.

According to Cognizant, Infosys violated the NDAA agreements, misappropriated Cognizant’s trade secrets, and stole its confidential information, as a means to assist Infosys in developing or enhancing its own competing software and service offering, the Helix. Cognizant filed suit against Infosys for violating the NDAA’s and misappropriating Cognizant’s trade secret information. Infosys subsequently filed a countersuit which alleged antitrust claims under Section 1 and 2 of the Sherman Act and the Texas Free Enterprise and Antitrust Act. Cognizant moved to dismiss the counterclaims.

Relevant Market. The court began its analysis by noting that Infosys must plead a relevant market to support all its counterclaims. Infosys defined its proposed relevant markets as: (1) “software products for healthcare payors located in the United States,” which it limits to Facets, QNXT, and Helix; and (2) “IT services for healthcare Payor Software located in the United States.”

With respect to the first defined market, the court found it was deficient because it omitted substitute products and in-house software solutions. The court cited Shah v. VHS San Antonio Partners, LLC, in which the Fifth Circuit held that a plaintiff’s failure to include “all interchangeable substitute products” merits dismissal. Infosys argued it need not provide such information because nonspecialized or in-house products aren’t realistic substitutes due to cost, scale, and expertise. But Infosys’ pleadings acknowledged that some customers currently use in-house systems instead of Cognizant’s software, contradicting its argument that they are not realistic substitutes due to cost, scale, and expertise.

The court also found Infosys insufficiently pleaded its second relevant market. The court found that Infosys failed to explain the boundaries of its proposed IT services market or whether technicians and updates are interchangeable across software platforms. Again, the court suggested that Infosys similarly excluded IT services substitutes from its proposed market despite seemingly acknowledging they exist.

The court dismissed the counterclaims finding Infosys failed to define a legally sufficient relevant market. The court did grant the counterclaimant leave to amend.

The Case is No. 3:24-cv-02158-X.

Judge: Starr, B.

Attorneys: Betty X. Yang (Gibson Dunn & Crutcher LLP) for Cognizant Trizetto Software Group Inc. Brent Caslin (Jenner & Block LLP) for Infosys Ltd.

Companies: Cognizant Trizetto Software Group Inc.; Infosys Ltd.

Cases: Antitrust TexasNews