Cox Automotive, perhaps the only dealership vendor with enough scale to compete squarely against CDK Global and Reynolds and Reynolds Co., took action against one of the dealership management system giants last week, filing an 11-count lawsuit against CDK for anti-competitive business practices.
Cox is the largest of several companies to sue CDK on antitrust violations after Authenticom, which filed an antitrust complaint against both CDK and Reynolds on May 1, opened the floodgates.
Over the past eight months, CDK and Reynolds have come under increasing legal fire. At least four dealership vendors — Cox, Authenticom, Motor Vehicle Software Corp. and Superior Integrated Solutions — have sued CDK, Reynolds or both companies for antitrust violations. At least four dealerships or dealership groups have filed class-action lawsuits.
Authenticom, Motor Vehicle Software and Superior Integrated Solutions are small companies compared with CDK and Reynolds. Their lawsuits made them Davids against two Goliaths.
But Cox Automotive fights in the same weight class as those two. With more than two dozen brands under the Cox Automotive umbrella in the U.S., "we touch three out of four vehicle transactions in some way," Cox Automotive President Sandy Schwartz is fond of saying.