Editor's note: An earlier version of this report incorrectly stated that MVSC once held a monopoly in California.
Motor Vehicle Software Corp., an electronic vehicle registration and titling services vendor, has filed an antitrust lawsuit against CDK Global Inc., Reynolds and Reynolds Co. and their joint company Computerized Vehicle Registration Inc., MVSC said Monday.
The complaint, filed in federal court in Los Angeles on Friday, says that CDK and Reynolds are illegally blocking MVSC from joining their data access programs, which would grant MVSC access to data from dealership management systems.
Computerized Vehicle Registration, a joint venture between CDK and Reynolds, competes with MVSC in Illinois and California, the lawsuit said.
In separate statements, both CDK and Reynolds declined to comment in detail on pending litigation, but said that MVSC elected not to participate in the DMS giants’ third-party programs.
Barred, priced out
John Brueggemann, chief strategy officer of MVSC, told Automotive News that MVSC applied at least three times, and CDK and Reynolds representatives told MVSC that it could not be in the program or said the companies would put MVSC in a pricing category that was “astronomically high” and that differed from the advertised price.
MVSC’s complaint alleges that CVR -- which it says is owned 80 percent by CDK and 20 percent by Reynolds -- has a monopoly over the Illinois electronic vehicle registration market and is trying to monopolize the California market.
MVSC has about 60 percent of the California market, said Brueggemann. MVSC, of Agoura Hills, Calif., works with about 1,050 dealerships in California and Oregon.
MVSC CEO Don Armstrong said in a statement that the company has made “every effort” to join CDK and Reynolds’ third party access programs but has been turned away.
‘Foster true competition’
“Our goal has been, and remains, to participate in the DMS providers’ standard third-party vendor programs at the prices they advertise,” he said. “We are simply looking to level the playing field and foster true competition by eliminating monopolies and closed programs.”
CDK and Reynolds’ behavior violates federal and state antitrust laws, the California Unfair Competition Law and the Illinois Consumer Fraud and Deceptive Business Practices Act, the lawsuit says.
Through the lawsuit, MVSC is seeking a permanent injunction barring CDK and Reynolds from “continuing unlawful conducts” and an injunction allowing MVSC to participate in CDK’s and Reynolds’ third-party access programs “on reasonable, non-discriminatory terms,” the statement said.
“By seeking to have CDK and Reynolds adhere to fair business practices and allow MVSC to fully participate in the DMS ecosystems, auto dealers and consumers alike will benefit from the innovation, enhanced security, and increased competition we bring to the market,” Armstrong said in the statement.
CDK, Reynolds responses
David Webster, a CDK spokesman, told Automotive News in an email that MVSC’s claims are “unfounded and highly misleading.”
MVSC “was offered access to our systems in a way that protects our customers’ data and the security of our system. The terms we offered them were equal to or better than other [electronic vehicle registration applications] which have access to CDK’s systems, but they have refused to reach an agreement,” he said. “We will not compromise the integrity of our systems or the security of our customers’ data, and we intend to defend our rights vigorously against this meritless lawsuit.”
Reynolds spokesman Tom Schwartz said Reynolds will allow any third-party vendor to join the Reynolds Certified Interface “on terms consistent with other similarly integrated applications.” He said other electronic vehicle registration applications are part of that certified program.
“We’re disappointed that MVSC has elected not to participate in the RCI program. We would very much like to have them in the program,” Schwartz said. “Instead, MVSC has decided to take this other action and that, too, is disappointing.”
In the past, both CDK and Reynolds have defended their practice of certifying, at a cost, outside software companies that want to have access to data in their dealership management systems as being necessary to maintain the security of the highly confidential consumer data found in those systems.
Vince Bond, Jr., contributed to this report.