Legal Issues

by Mike Masnick

Filed Under:
magic quadrant, opinion

gartner, zl

Yes, Gartner Is Free To Pick Which Companies Fit In Its Magic Quadrant

from the and-which-don't dept

Whatever you might think of Gartner's research and its silly "magic quadrant" system, I don't think anyone could reasonably question that it was just Gartner's opinion. Yet, a few months ago, we wrote about a company, ZL, that was so upset that Gartner put it in its niche quadrant, rather than the desired "magic quadrant," that it sued. We didn't expect the lawsuit to get very far (similar lawsuits over how Google ranks companies have been tossed pretty quickly). And, indeed, a judge appears to have found little worthwhile in ZL's lawsuit, quickly dismissing all of the arguments, and noting that Gartner is free to have its own damn opinion, no matter how much others (or the subjects of that opinion) might disagree:
"Finally, ZL argues that Gartner's representation that it provides 'highly discerning research that is objective, defensible, and credible to help [customers] do their job better' implies that its Reports contain objective assertions of fact. Gartner notes that this language appears not in the MQ Report but on its website and that the language describes Gartner's research services generally rather than the MQ Report in particular.... More to the point, the terms 'objective, defensible, and credible' do not imply the assertion of factual information. Gartner argues convincingly that even if its self-description did refer to the statements within the MQ Report, its 'sophisticated readers' -- corporate and government executives and professionals -- would not infer that Gartner's rankings were anything other than opinion."
Still, the judge gave ZL an opportunity to amend the complaint, and the statement from the company indicates that it's planning to try to come up with some other ridiculous argument against Gartner. Maybe it should just focus on satisfying what its customers want, and stop worrying about what some analyst at Gartner has to say.

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  • identicon
    sophisticated reader, 17 Nov 2009 @ 4:54am


    "the terms 'objective, defensible, and credible' do not imply the assertion of factual information"

    I never did think they knew what they were talking about

    reply to this | link to this | view in chronology ]

  • icon
    Kingster (profile), 17 Nov 2009 @ 5:22am

    Gartner's Research

    In my own opinion is that it's just not very good. I don't know how much my company pays for it, but especially in the focus area that I'm interested in, it's not worth it. Having worked in the past for a company that had Gartner products, some Magic, some not... I can say companies are very proud of those Magic things...

    As far as I can tell, the researchers at Gartner are over-paid whiny "thinkers", and NOT "doers". I would suspect that a large number of them haven't been on a real deployment of product in 10 years. Save your money. Do some research yourself.

    reply to this | link to this | view in chronology ]

  • icon
    Peter Munro (profile), 17 Nov 2009 @ 5:28am

    What if...?

    ...ZL had won the case? If Gartner had had to reclassify them, would Gartner's "discerning research that is objective, defensible, and credible" have been turned upside-down at the behest of a third party who decided to sue, thus rendering their research no longer credible, and therefore nullifying the original lawsuit?

    Just curious. :-)

    reply to this | link to this | view in chronology ]

  • icon
    mobiGeek (profile), 17 Nov 2009 @ 7:19am


    Maybe it should just focus on satisfying what its customers want [...]

    ...or if they really want to play with the Big Boys(tm), they should start playing Gartner's game.

    You can't win if you don't play.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 17 Nov 2009 @ 9:29am

    Not always so black and white

    Companies like Gartner want to have it both ways: On the one hand, they want to sell themselves as vendors of objective research. On the other hand, when called on the damage they might be doing to a company, they will claim "Oh, it's just our opinion".

    Gartner does indeed sell its research to sophisticated buyers who should know enough to understand the limits of their objectivity - not that they always do. (Many years back, the line was "You can't be fired for choosing IBM." Today, failed technology decisions are often defended as "That was industry best practice, Gartner said so.") Absent "actual malice" or some such concept imported from other areas of First Amendment jurisprudence, or outright fraud, they should be permitted to argue that the sky is green, if that sells their reports

    But that doesn't mean *every* purveyor of "opinion" dressed up as "objective research" in *every* circumstance should be given a pass. Look at the ratings agencies like Moody's. They arguably sold their ratings to whoever would pay enough. (They would, of course, object to that characterization; but when you're being paid by the company you are rating, and many of your ratings for your biggest clients have turned out to be ... not quite accurate - it's hard to deny that there is some element of this at play.) Those bogus ratings had significant real-world effects, because they had become built in to the financial system. Funds were sold on the basis of pledges to invest only in "safe" instruments - defined by Moody's and similar ratings. There were laws on the books that referred explicitly to such ratings in determining where government funds, or regulated investments like pensions, could be put.

    All of those things contributed to making Moody's ratings valuable, above and beyond any value the competitive marketplace in investment opinion might have placed on them. At some point, if you're going to be rewarded in special ways for allegedly providing something beyond "mere opinion", you should expect that a defense of "it's just my opinion" won't be acceptable.

    At the moment, it seems that Moody's and friends have the law on their side - attempts to call them on their behavior don't seem to be going anywhere in court. The legal issues are something to be thrashed out by courts and lawyers - and perhaps the legislatures. But the issue of whether it's *right* for someone to gain special recognition and rewards, above and beyond that of other "opinion publishers", and then be immune from any consequences when they violate that trust - that's something else again.

    -- Jerry

    reply to this | link to this | view in chronology ]

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