December 3, 2020

CDK settles antitrust lawsuit over data access

CDK Global Inc. will make a one-time cash payment to data integration service provider Authenticom as part of a settlement in a federal antitrust case, the company said last week.

Terms of the settlement are confidential, a spokesman for the Hoffman Estates, Ill., dealership management system giant told Automotive News. CFO Joe Tautges told analysts on CDK’s fiscal first-quarter earnings call last week the settlement payment is expected to be incurred in its fiscal second quarter, which ends Dec. 31. “We’re happy to be able to put another lawsuit behind us and continue our focus on the future,” he said.

An Oct. 28 court filing in U.S. District Court for the Northern District of Illinois indicates the two companies agreed to dismiss Authenticom’s claims against CDK filed in 2017 and CDK’s counterclaims against Authenticom filed in 2018. Authenticom’s suit claimed CDK and rival Reynolds and Reynolds Co. agreed to block third-party data integrators from accessing data from dealership clients on their DMS to maintain their competitive advantage in the market.

CDK countersued, alleging Authenticom improperly accessed CDK’s dealership management system without being authorized to do so.

The Authenticom case was part of broader, ongoing federal antitrust litigation against CDK and Reynolds. CDK said in a regulatory filing the Authenticom settlement is the fourth case to be resolved, with two pending.

CDK also last week reported its fiscal first- quarter net profit slipped on largely flat revenue of $493.6 million. The company said net earnings attributable to CDK were $55.7 million in the quarter that ended Sept. 30, down 32 percent from $82 million in the year-earlier quarter. Revenue, while nearly flat compared with $494.6 million in the year-earlier quarter, was up nearly 10 percent from $449.6 million in the fiscal fourth quarter that ended June 30.