Car Dealership Accuses CDK, Reynolds of Forming Anticompetitive ‘Duopoly’

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CDK Global, LLC and The Reynolds and Reynolds Company are facing a proposed antitrust class action lawsuit filed by a South Carolina car dealership that claims the defendants engaged in anticompetitive behavior by which they’ve systematically raised the prices of their products while eliminating competition.

The defendants sell Dealer Management System Software (DMS) and Dealer Data Integration Services (DDI) that the complaint says car dealerships must have in order to do business. The defendants’ customers together make up about 75 percent of the market, the suit says, and are locked into five- or seven-year contracts to use the defendants’ products.

The complaint argues that CDK and Reynolds have entered into anticompetitive agreements that allow them to maintain a “duopoly” over the industry and force out any possible competitors. According to the complaint, the companies divided up the integration services market between them instead of competing against one another and blocked competitors from accessing data on their DMS. On top of that, the suit claims, the defendants charge customers and third-party vendors excessive fees to use or access their software and services, leaving them with no option but to pay the allegedly inflated prices.