In QGSI Inc. v. IBM Global Financing et al., Southern District of Florida Judge Kenneth L. Ryskamp, granted a motion to dismiss a case filed by a reseller of computer mainframes. QSGI Inc. sued IBM Corp. alleging that IBM violated Florida’s Antitrust and Deceptive and Unfair Trade Practices Acts by engaging in monopolistic business practices that drove QSGI into bankruptcy. In its suit, QSGI alleged that IBM instituted a “six-month rule” by which it stopped freely selling to QSGI the parts and microcode necessary to modify a mainframe for customer use. Instead, IBM refused to sell these components until six months after the used mainframe was installed and set up. This drove QSGI out of the market while an IBM affiliate and co-defendant IBM Global Financing, which did not have to abide by the six-month rule, emerged as the leader of the industry, selling its products at uncompetitive prices.
In granting IBM’s motion to dismiss, the court held that (1) even though QSGI adequately alleged the structure of the market for new mainframe computers, it failed to allege the structure of the alleged market for used IBM mainframe computers; and (2) QSGI failed to allege its own market share before and after IBM’s adoption of its monopolistic policies. The court further held that QSGI failed to allege that IBM acted deceptively in adopting the six-month rule. QSGI plans to amend its complaint.