in brief IT services company CSG has lost a Supreme Court appeal against a ruling that would see its Queensland customers able to stop using CSG for printer maintenance services, instead choosing those supplied by rival Fuji Xerox Australia (FXA).
FXA had contracts with CSG, which saw the latter provide printer maintenance services to FXA's customers. It severed two dealer contracts with CSG in November after the IT services company extended Canon printer servicing deals, which saw CSG maintain over 10,000 Canon multifunction devices across Australian capital cities, into Brisbane and Maroochydore. This extension added approximately 1400 devices to the CSG contract. Since Canon is FXA's direct competitor, FXA did not want to continue its agreement with CSG.
Supreme Court Justice Robert McDougall ruled last year that FXA's decision to end the contracts was legal. CSG appealed the ruling and has today lost its fight in the NSW Supreme Court.
CSG said that it was still too early to determine the full cost the decision will have on its bottom line, but at the time the contracts were severed last year, it predicted that it could incur $4 million in lost business as customers novate their agreements to FXA. This, however, is only a worst-case scenario for the company.