CDK has agreed to pay $100 million and up to $250,000 for notice and claims administrative costs in an anti-trust case brought by dealerships nearly seven years ago, according to a motion for settlement filed Friday. 

The case brought against CDK and Reynolds and Reynolds Co. alleged both companies committed anti-trust violations, according to court records. Reynolds previously settled with dealerships for $29.5 million.

Dealerships claimed they overpaid for services due to the anti-trust violations, according to court records.  

Both CDK and Reynolds offer a dealer management system (DMS) software to collect, manage, and deploy data they generate, documents say. The software is also used by car dealers to provide services like inventory management, customer relationship management, warranty services, repair orders, and electronic vehicle registration and titling, according to an overview of the case recently written by Judge Rebecca R. Pallmeyer in a memorandum opinion and order. 

“Historically, both CDK and Reynolds provided dealers with “open” DMSs, meaning that — explicitly or implicitly — CDK and Reynolds permitted dealers to give third parties direct access to DMS data,” Pallmeyer wrote in the memorandum. 

Plaintiffs alleged that in 2013 CDK and Reynolds orally agreed to restrict access to dealer data to “destroy” independent data integrators, Pallmeyer’s memorandum says. It says in 2015 the two companies entered into a written agreement to not assist independent data integrators in any effort to access or integrate with the defendant’s DMS. 

“By eliminating competition for data integration services, Plaintiffs claim that CDK and Reynolds have usurped control over dealer data and thwarted dealers’ ability to control who can access and use their data. As a result, vendors have no choice but to access certified data integration from CDK and Reynolds, at a price much higher than they would pay to an independent Integrator,” the memo says. 

The case was set to go to trial in September. Neither CDK nor Reynolds admitted fault in their settlements. 

The settlement says the interim lead class counsel and the plaintiffs’ Steering Committee have spent thousands of hours advancing the claim. 

“Discovery has been considerable and far-reaching,” the settlement documents say. “Defendants produced over a million documents. Class counsel took or defended over one hundred depositions, including those of defendants’ employees and expert witnesses, and subpoenaed at least 30 non-parties for data and information (taking several of their depositions). Class representatives produced over 81,000 documents and almost all were deposed. There were multiple rounds of interrogatories and requests for production on both sides as well as extensive motion practice.”

The settlement states possible class members will be notified using a detailed customer list obtained from CDK and Reynolds. Notification will include dealership customers who purchased DMS from Sept. 1, 2013 to July 20, 2024. 

Reuters reports that Pallmeyer ruled last month software vendors could certify as an anti-trust class in a suit against CDK. The software vendors’ suit remains ongoing separate from the dealership suit. 

IMAGES

Photo courtesy of BalkansCat/iStock