A lawsuit filed by Authenticom, a data integration service provider, on May 1 cited a February 2015 document in which CDK and Reynolds agreed that they would no longer compete in the dealership data integration market. Under the written agreement, CDK and Reynolds would be the exclusive data integration providers for data on their respective DMS platforms.
The agreement protects CDK and Reynolds' duopoly in the DMS market, "choking off the natural progression of dealer operations to more efficient and less expensive vendor software solutions," Cox's complaint, which referenced the Authenticom suit, said. And by eliminating data integration competition, CDK and Reynolds have demanded that vendors pay exorbitant fees for access to and use of the dealerships' data, it contended.
Vendors that integrate into Dealertrack's DMS, a Cox product, must pay about $50 per rooftop per month per integration, compared to $250-$1,000 for vendors that integrate with CDK's DMS, one source said.
Those fees are often passed onto the dealership. The fees make Cox's products and services less appealing than Reynolds and CDK products, which do not have to pay integration fees, the complaint said.
CDK and Reynolds have plotted to control data integration to restrict other vendors' access and use of dealerships' data, the complaint said.
For example, Cox cited in its complaint, CDK has denied Dealertrack's Sales and F&I access to prevent it from electronically contracting a lease transaction, requiring dealerships to double-enter data for lease contracts.
"There is no technological or other credible reason for CDK to withhold this functionality from Dealertrack's Sales and F&I solutions other than for an anticompetitive reason: to favor CDK's own F&I solutions," the complaint said.
CDK also restricts products from Cox's Xtime from creating or modifying a repair order in the DMS but allows its Service Edge application, a CDK product, to do so.
According to internal CDK documents, referenced by Cox, CDK wants "to disrupt the workflow" by stopping Xtime's products from creating or modifying repair orders in order to give CDK's Service Edge product an advantage.