Late last month, Arizona auto dealers were handed a major victory in U.S. District Court, as a federal judge refused to block a state law that bars dealer data companies from preventing auto dealers from granting third-party access to their systems. The law in Arizona, now allowed to go into effect, is a big victory for allowing more competition in the dealer management system development space, and could have major implications for dealers across the country.
NADA was a major supporter of the law, and the organization’s legal defense fund contributed more than $500,000 to the Arizona Auto Dealers Association to help them fight Reynolds & Reynolds and CDK, the two major dealer management system providers who have sued in federal court to block the law.
While the law is now in effect in Arizona, the court battle, which has already lasted over 15 months, will continue in federal trial court. The state of Arizona, led by attorney general Mark Brnovich, will continue defending the law, which is similar to laws passed in Montana, Oregon, North Carolina, and Hawaii, according to Automotive News.
According to an NADA summary, the Arizona law contains several pro-consumer and pro-competition provisions in it, including barring DMS vendors from charging for access to the dealer’s proprietary data held in the system, and allowing dealers to terminate DMS vendor contracts at any time with 90 days’ notice.Download Bulletin PDF