CDK Global settled an antitrust lawsuit that claims it caused hundreds of software vendors to overpay for vehicle dealership data by restricting access for a price tag of $630 million
The proposed settlement was filed on Jan. 25 night in a federal court in Madison, WI and awaits a judge’s approval. The vendors had indicated they would seek damages of $490 million at trial, with a jury award could have been tripled under antitrust law.
“CDK decided to settle the long standing case now while not admitting any wrongdoing in order to move forward and focus our whole attention on our dealers and OEM’s,” said CDK chief executive Brian MacDonald in a video released that coincide with the settlement announcement. “We continue to stand by our belief that the case was without merit we felt it was time to bring this long standing litigation to a conclusion… we are glad to get this old litigation behind us in order to focus on our future.”
AutoLoop Lawsuit
CDK, owned by Brookfield Business Partners, was sued by vendor AutoLoop along with over 200 other companies that purchased data integration services since October 2013 for inventory management, repair orders, warranty services and other functions. Filed in 2018, the lawsuit accused CDK of cutting off access to auto dealer systems and driving up prices vendors pay to access data for their apps. A judge certified the case as a class action last summer.
Lawyers for AutoLoop and other members of the class action at Kellogg, Hansen, Todd, Figel & Frederick called the settlement “extraordinary” in a statement and said it stemmed from “years of hard-fought litigation.”
The settlement comes after CDK agreed to pay $100 million in August 2024 to settle a class action by U.S. auto dealerships claiming they overpaid for the company’s dealer management systems. The plaintiffs had alleged CDK violated antitrust law by conspiring to eliminate competition among vendors that need to access dealer data to create apps–such as inventory management, repair orders, warranty services and other functions within dealer-management systems—for dealers.
MacDonald’s Statement
MacDonald offered that “resolving this dispute is a good outcome not just for CDK but for all players in the industry” and noted litigation was inherited by Brookfield and the current management team when CDK went private in 2022. Company officials said the settlement will be paid over three years from cash on hand.
“While some of our competitors and some media will try to spin this settlement as a doomsday event for CDK I want you to hear directly from me with the facts of the situation,” MacDonald said. “This settlement will have no impact on CDK’s commitment to you and our investment profile to help you drive your business forward.”
CDK is still facing other legal battles, most notably with Tekion in a battle over the availability of data from franchise dealer management system (DMS).
Tekion Allegations
Tekion, a cloud-native platform serving the automotive retail ecosystem, filed the 37-page federal antitrust lawsuit in San Francisco in December 2024, aiming to end CDK’s “data monopolization,” asking for damages and an injunction to facilitate data transfer to Tekion within 10 days of a dealership’s request. The lawsuit alleges “Tekion has suffered economic harm, including loss of revenue, loss of market share, and increased costs and expenses.”
At issue is Asbury Automotive Group move last January to partner with Tekion for a pilot program. In October 2024, a Georgia court ordered CDK to provide the data of dealerships to Tekion. CDK refused to transfer the dealerships’ data to and sued Asbury when it tried to access its own data.
With the filing of the lawsuit, Jay Vijayan, founder & CEO of Tekion, accused CDK of resorting to unfair and anticompetitive business tactics to protect its dominant market position, including holding dealers’ data hostage to stop them from switching to a platform of their choice. “We have decided to stand up to CDK’s illegal practices to preserve fairness and competition in the automotive retail ecosystem,” said Vijayan.
CDK Response
CDK issued a statement, firing back at Tekion’s lawsuit as “a marketing stunt in an attempt to bypass contractual terms and industry practices…we are confident our industry will see this for what it really is. We view the recently filed complaint as low on substance and high on rhetoric. We believe Tekion filed it in retaliation to a cease-and-desist letter CDK sent to Tekion related to unauthorized access to our systems that was detected by our security monitoring protocols.”
The Austin, TX-based company noted Tekion filed the lawsuit three days after CDK’s cease-and-desist letter was sent.
CDK officials said the DMS market has always been competitive, yet “for years, we have facilitated sending and receiving data transfers for dealers and countless vendors and will continue to do so.”
“Based on the evidence gathered to date, CDK has reason to believe that Tekion is engaged in the persistent violation of multiple state and federal laws that prohibit Tekion’s illegal hacking and computer fraud, privacy, copyright infringement, misappropriation, unfair and deceptive trade practices, and tortious interference with contract,” CDK stated in the letter.
