In QSGI Inc. v. IBM Global Financing et al., Southern District of Florida Judge Kenneth L. Ryskamp dismissed computer reseller QSGI Inc.’s claim that IBM’s monopolistic conduct bankrupted it. The court held that the fatal flaw in QSGI complaint was the lack of injury to competition, as opposed to the company itself. As a result, the complaint failed to establish antitrust injury under Florida’s state antitrust act.
QSGI, which purchases and resells mainframe computers, alleged that in 2007, IBM instituted the so-called “six-month rule,” cutting off sales of the parts and microcode that QSGI needed to modify mainframes until six months after the installation of the used mainframe. Under this system, QSGI could not compete, but IBM affiliate and co-defendant IBM Global Financing, which was exempted from the rule, could. And absent competition, QSGI alleged, was able to increase its prices to supra-competitive levels.
The court held that no injury to competition was alleged because the complaint acknowledge “eight competitors, all of which are still in business,” and none of which had “lost market share as a result of the six-month rule.” The allegations that purchasers paid higher prices from IBM Global Financing were insufficient the court held because the customer specific nature of mainframe installations made it difficult to compare prices.