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“On June 22, 2017, we received from the FTC a civil investigative demand consisting of interrogatories and a request to produce documents relating to any agreements between ourselves and Reynolds and Reynolds,” CDK said in its 10-K filing. “We are responding to the request.
“The request merely seeks information, and no proceedings have been instituted,” CDK added. “We believe there has not been any conduct by the company or its current or former employees that would be actionable under the antitrust laws in connection with the agreements between ourselves and Reynolds and Reynolds. At this time, we do not have sufficient information to predict the outcome of, or the cost of responding to or resolving this investigation.”
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Thomas Schwartz, a spokesman for Reynolds, and Steve Cottrell, president and chief executive of Authenticom, both declined to comment on the matter Wednesday. A spokesman for CDK also declined to comment.
"The FTC does not comment on or confirm the existence of investigations,” an FTC spokeswoman said.
CDK is publicly traded and is required by law to reveal to shareholders risks to its business. Reynolds is privately owned.
Both Reynolds and CDK offer auto dealerships software and business management products and services. Authenticom, based in La Crosse, Wisc., has charged those two companies with forming an agreement to block it from accessing dealership data, even when the dealers want to allow Authenticom to that data.
Motor Vehicle Software Corp. — a California-based provider of electronic vehicle registration and titling services — filed an anti-trust lawsuit in federal court in Los Angeles against Reynolds and CDK with similar allegations earlier this year.
Reynolds and CDK are defending themselves against both lawsuits.
Most recently, an appeals court in Chicago stayed a preliminary injunction against Reynolds and CDK, giving both companies a momentary win in the ongoing legal battle with Authenticom. That injunction allowed the latter company access to the Reynolds and CDK databases.
CDK President and CEO Brian Patrick MacDonald briefly disclosed the FTC action in an earnings call last week.
“Importantly, these matters have not and will not distract us from implementing our plans and achieving our targets,” he said according to a call transcript.
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