Antitrust Class Actions Continue to Roll in Against CDK Global, Reynolds and Reynolds Company

New to ClassAction.org? Read our Newswire Disclaimer

A proposed antitrust class action filed in Ohio against CDK Global and the Reynolds and Reynolds Company has been added to the expanding multidistrict litigation against the companies that now includes 10 lawsuits filed by car dealerships nationwide.

Filed by an Olathe, Kansas car dealership, the complaint alleges CDK and its co-defendant have placed the market for data management (DMS) and integration systems for car sellers in a stranglehold that leaves members of the proposed class with no choice but to turn to the companies for the vital management tools. Without such tools—which allow car dealers to manage payroll and customer information, inventory, title transfers and financing data—a dealership’s operations would simply grind to a halt, the lawsuit says. From the complaint:

“There are two dominant players in the DMS market, defendants CDK Global and Reynolds & Reynolds, which together control 75% of the market. For decades, both CDK and Reynolds assured their customers (the dealerships) that the data that dealers gathered and stored in their [data management systems] belonged to the dealers. CDK and Reynolds were adamant that dealers could do whatever they wanted with their own data, including allowing data integrators to access the data to make it usable for vendors.” 

This third-party access was cut off by Reynolds and Reynolds in 2007, the lawsuit claims, effectively leaving the company as the only resort should a vendor want integration services for a dealership’s data management system. At the time, CDK was not a fan of this move, the complaint continues, with its CEO reaffirming that dealers were the true owners of their own data. The lawsuit states that after a decade of opposition toward Reynolds and Reynolds’ conduct, CDK did an about-face:

“CDK decided to cut off all third-party access to its own [data management systems] platform. Worse, CDK entered into an agreement with Reynolds not to offer a competing data integration service for accessing data within the Reynolds DMS.”

According to the complaint, the defendants’ market-cornering tactics have allowed them to charge auto dealers supracompetitive prices, which the case describes as “an exorbitant fee to gain access to their own data.”