Network management firm NetScout has won the right to take Gartner Group to court, alleging that its ‘Magic Quadrant’ technology market positioning reports are corrupt and ‘pay-to-play’. The Connecticut Superior Court has rejected Gartner’s petition for the case to be dismissed.

NetScout claims that Gartner’s Magic Quadrant ratings were “corrupted by favoritism shown to Gartner’s major customers” and that “its ranking system is based not on objective facts, but rather on Gartner’s ‘pay-to-play’ business model.” NetScout also accuses Gartner of corporate defamation, alleging that the rating and statements about NetScout in Gartner’s 2014 Magic Quadrant report for Network Performance Monitoring and Diagnostics were defamatory and untrue.

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– Thinkstock / pmcdonald

See you in court

This case began in August 2014 when NetScout took umbrage at Gartner Group’s decision to rank it in its Magic Quadrant as a “Challenger” rather than a “Leader.” NetScout objected to the rating it received because it thinks its ranking is based, in part, by its unwillingness to “pay to play”. 

The NetScout suit contends that analysts’ opinions are influenced by the amount of money some vendors spend with Gartner. It alleges that Gartner’s “substantial success is due to the worst kept secret in the IT industry” -  that Gartner rewards clients who spend substantial sums on its various services by ranking them favorably in its influential Magic Quadrant research reports.

The Court rejected Gartner’s attempt to dismiss the Revised Complaint, denying “in its entirety” Gartner’s motion to strike the case out. Notably, the Court held that “Gartner has not met its burden of showing,” among other things, “that the statements in the Magic Quadrant are protected opinions.”

Buying a place?

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Jeff Levinson, general counsel, NetScout

“The Court’s well-considered decision is a significant win for NetScout, but more importantly, a win for our customers and the industry,” said Jeff Levinson, NetScout’s General Counsel. “The Court’s ruling makes clear that no law allows Gartner to defame technology companies.”

 The court judgement says: “…the court finds … that NetScout has sufficiently pleaded the facts showing that it has been damaged by Gartner’s ‘pay-to-play’ scheme.”

The judgement goes on: “The complaint states that Gartner has a model in which it leverages its influence ‘to pressure IT vendors that are the subject of that research into purchasing additional services from Gartner,” i.e., the ‘pay-to-play’ model.

NetScout alleges that its competitors that spend a significant amount of money on Gartner’s ‘consulting’ services have been placed in the ‘leaders’ section of the Magic Quadrant.

This is not the first time that Gartner Group has been sued for unfavorable coverage. ZL Technologies sued Gartner Group in 2009 for putting it in the niche category of its Magic Quadrant and lost. The difference this time is that the court is prepared to give legitimacy to NetScout’s allegations and they will now be heard in open court.