Tekion sues CDK Global, accuses firm of holding data 'hostage'

Automotive software firm Tekion is suing CDK Global over alleged anti-competitive practices involving dealership data.

Driving the news: In a press release posted to its website, Tekion accused its rival of “engaging in a systematic scheme to thwart competition in the franchise dealer management system (DMS) market.”

• The company claims that CDK has frequently refused to turn over data belonging to dealers looking to switch DMS providers, effectively holding its clients’ information “hostage.”

• Tekion founder and CEO Jay Vijayan argues CDK had resorted to these tactics to make up for its “outdated” technology and retain its market share.

Zooming in: In one of the instances cited by the plaintiff, CDK allegedly withheld data from Tekion after four Asbury Automotive dealerships in Georgia signed up for the latter’s pilot program.

• While a judge eventually ruled in Tekion’s favor, the company claims the case resulted in a weeks-long delay for the affected storefronts.

• CDK had also sued Asbury for attempting to obtain group-wide data stored within its DMS, arguing that its current contract limited the company’s access to certain information.

Looking back: While CDK’s DMS is used by roughly 50% of U.S. dealerships, Tekion’s new lawsuit adds to the list of challenges facing the firm in 2024.

• Earlier this year, a cyberattack against CDK caused nationwide software outages that disrupted business for thousands of dealers. Hackers believed to be based in Europe held the company’s data for several weeks, demanding millions in ransom money.

• While service was eventually restored, industry experts voiced concern over half the auto sector’s reliance on a single provider, which they blamed for the interruption’s widespread impact.

Looking ahead: If Tekion’s lawsuit is successful, CDK will be required to pay for legal expenses and damages as well as “any ill-gotten gains or profits” achieved through unfair practices. It will also be required to transfer data to Tekion within a 10-day period following a client dealership’s request.

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