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Software Vendors Win Class Action Status in Antitrust Case Against CDK Global

By  |  July 25, 2024
Software
A federal judge in Chicago has ruled that software vendors can collectively sue automotive technology giant CDK Global. The vendors allege that CDK restricted data access and imposed exorbitant overcharges, potentially amounting to hundreds of millions of dollars.

Chief U.S. District Judge Rebecca Pallmeyer announced on Tuesday that AutoLoop, a prominent software provider serving thousands of dealerships, met the legal criteria to advance its 2018 lawsuit against CDK as a class action. The lawsuit now includes hundreds of other vendors within the auto industry. These vendors accuse CDK of violating antitrust laws by stifling competition. They are collectively seeking estimated damages of $395 million from the Austin, Texas-based CDK, which provides software platforms that are integral to daily dealership operations, including sales, financing and service management, reported Reuters.

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    The class comprises vendors that develop applications for inventory management, repair orders, warranty services and other functions essential to dealer-management systems. According to the plaintiffs, CDK significantly restricted previously broad access to dealer systems, which consequently drove up the costs that AutoLoop and other vendors incur to access necessary data for their applications. The resulting overcharges have reportedly burdened the vendors with hundreds of millions of dollars in additional costs.

    Judge Pallmeyer’s order paves the way for a trial in Wisconsin, where the lawsuit was originally filed before being consolidated in Illinois. However, no trial date has been set. The court has not yet determined whether to certify a nationwide class of dealers.

    CDK has consistently denied any wrongdoing. AutoLoop, CDK, and their respective attorneys have not provided immediate comments following the recent ruling.

    The class-action status granted by Judge Pallmeyer encompasses 244 software vendors who, since October 2013, have purchased data integration services from CDK or one of its competitors, Reynolds & Reynolds, the latter of which is not implicated in this lawsuit.

    Source: Reuters