Authenticom wins federal injunction against CDK, Reynolds

A federal judge has issued an injunction to Authenticom in its antitrust lawsuit against CDK Global and Reynolds and Reynolds. The order by Judge James Peterson was the final form of his preliminary injunction issued on July 17. The injunction states that CDK and Reynolds must stop blocking Authenticom from providing data services to dealers and vendors.

In the injunction, Peterson stated that CDK and Reynolds “must not prevent Authenticom from using dealer login credentials to provide data integration services for dealers” who authorized Authenticom to do so as of May 1.

Wisconsin-based Authenticom designed software that integrates auto dealers’ data, such as sales, inventory and service figures, for more than 15,000 dealerships nationwide. As a third-party data integrator, Authenticom links car dealers to software vendors such as CDK and Reynolds. Its lawsuit against both businesses accuses them of locking the seller out of databases essential to its operations and threatening Authenticom’s survival.

Peterson’s ruling bars CDK and Reynolds from enforcing contract provisions that restrict dealers and vendors’ ability to do business with Authenticom. It also prevents both from retaliating against dealers and vendors who choose do business with Authenticom.

According to Authenticom CEO Steve Cottrell, “[The ruling] is another important step forward for Authenticom and the entire automobile industry as a whole.” In his official statement, Cottrell said that, “We look forward to providing secure, cost-effective, and reliable data integration services to our dealer and vendor customers, finally without the threat of being hindered by CDK’s and Reynolds’s anti-competitive conduct.”

CDK and Reynolds, which are both DMS software providers, are accused of engaging in an illegal plot that has cost Authenticom millions of dollars and threatened the company’s survival. Authenticom asserts that both companies’ actions have plunged its profits down almost 80 percent since the third quarter of 2015. It also claims that Authenticom wasn’t able to pay its tax obligations of more than $1 million this year.

Reynolds has filed a countersuit against Authenticom, stating that the plaintiff is a “hostile integrator” and that Authenticom has hacked into Reynolds’ systems to “scrape” – or extract – data. Reynolds says those alleged actions have placed at risk the private information of millions of people.

CDK has stated its intent to appeal the decision because, in its view, the injunction should not “give Authenticom free reign to maximize its business as it sees fit.”

The next step in the suit is an as-yet undetermined date for a jury trial.

“Where you can go before an impartial judge or jury, and they can decide the facts along with the law of whether or not you were wrongly treated,” said Rep. Ron Kind (D-Wis.), “and that’s exactly how this process worked out for Authenticom.”


Let us know! Have you done business with Authenticom and CDK and Reynolds? What was your experience?

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