CDK Global is set to pay 100 million dollars to settle a class-action antitrust lawsuit. The lawsuit, filed in 2017, was originally against CDK and Reynolds and Reynolds, however, Reynolds previously settled. Joining us on the latest Inside Automotive episode with more on this win for dealers is Len Bellavia, Founding Partner of the law firm of Bellavia Blatt, also known as DealerLaw.com.
Key Takeaways
1. The class action suit against CDK Global and Reynolds and Reynolds began in 2017. The lawsuit accused these major DMS providers of colluding to overcharge dealers by charging high fees for access to their own data, which third-party vendors aggregated.
2. CDK Global has agreed to pay $100 million to settle the case, while Reynolds and Reynolds had previously settled. The settlement will benefit approximately 12,000 to 17,000 dealer rooftops across the country, covering the period from 2013 to the present.
3. Dealers who participated in the class action will receive compensation, but the exact amount each dealer will receive depends on the number of claims filed. This settlement also indirectly fosters a more competitive marketplace by challenging CDK and Reynolds’ duopoly control.
4. The lawsuit has led to increased competition in the DMS market, with new vendors entering the space. This heightened competition is expected to result in more competitive pricing for dealers moving forward.
5. This case sets a precedent for how class action suits can address systemic issues within the automotive industry. It serves as a model for future legal actions where dealers face similar challenges, highlighting the effectiveness of class actions in advocating for fair treatment and compensation.
"At root, dealers were being overcharged for access to their own data, and the class action mechanism allowed us to aggregate these grievances into a collective legal action that has resulted in a significant settlement," said Len Belavia. "This case is not just about the monetary settlement; it has reshaped the competitive landscape of the DMS market." – Len Bellavia
