The recently formed ChoiceParts LLC has filed a federal antitrust lawsuit against the Big Three--Ford Motor Co., Daimler-- Chrysler Corp. and General Motors (GM) Corp.-for allegedly denying the company access to data that is crucial to keeping the online parts locator in business.
ChoiceParts LLC vs. General Motors Corp., DaimlerChrysler Corp. and Ford Motor Co. was filed Jan. 4 in US. District Court for the Northern District of Illinois Eastern Division. At press time, no trial date had been set.
The suit charges the three automakers with violating the Sherman Antitrust Act for their refusal to provide parts data, such as wholesale parts prices and parts identification numbers, which are necessary for obtaining parts.The company also accuses the Big Three of acting in an anti-competitive manner by deciding to jointly create a competing venture while continuing to deny ChoiceParts the parts data it needs. The new undertaking was introduced on Dec. 7 as the "OE Connection."According to the lawsuit, there are plans to roll it out sometime during the first quarter of 2001.
"Filing this lawsuit was the penultimate step for ChoiceParts.The last would have been to merely cede the marketplace, and we're not going to do that;' says Chan Galbato, chief executive officer (CEO) of ChoiceParts. "This lawsuit, at its core, is about the right to compete.We're only articulating our right to compete-nothing more, nothing less.We're not asking for any special favors. "
Galbato says ChoiceParts is ready to bring its product to market and adds that the company has a responsibility to its customers, employees and investors to do so. ChoiceParts has an existing customer base of about 8,000, comprised primarily of GM, Ford and DaimlerChrysler dealers. More than 250 of the vehicle retailers are waiting for ChoiceParts' latest product, Galbato says. But until it can obtain parts data from the Big Three, the next generation of its product has to be put on hold.
"Prior to formation of their own competing venture, these defendants applauded the opportunity that ChoiceParts would offer their automotive retailers," Galbato says. "However, the defendants then all coincidentally decided to form their own venture in the same market space." Galbato says this venture was clearly formed to block any competition in the advanced-- parts procurement market.
Ford's legal department is reviewing the specific charges made in the complaint, and it will formally respond to each claim when it feels it is appropriate, according to a written statement issued by the company. For now, Ford offered this statement: "We believe the allegations are unfounded, and [we] will seek swift dismissal of the lawsuit."
GM also denies all of the lawsuit's claims. "GM did not conspire with Ford and DaimlerChrysler to deny ChoiceParts the data license they seek," says Steven Cernak, GM's attorney for the case, in a written statement about the lawsuit. "GM made an independent decision to deny ChoiceParts the data and immediately disclosed its decision to ChoiceParts.The information sought by ChoiceParts is GM information, and we have a right to deny their request for this information. Furthermore, GM believes ChoiceParts can produce a useful and competitive product with GM data-they simply choose not to."
ChoiceParts' accusation that the OE Connection could monopolize the parts and locator markets is absurd, Cernak says, adding that dealers and consumers will continue to have choices. The OE Connection will just serve as another viable option, he says.
DaimlerChrysler shares the viewpoints of its competing carmakers. "Anybody with $125 can file a lawsuit in federal court," says Jay Cooney, senior manager of litigation communications at DaimlerChrysler. "They won't win. Their claims are bogus. They're operating under a conspiracy theory. There is no basis for the claims."
Cooney says DaimlerChrysler told ChoiceParts in December that it couldn't provide the data it was requesting because it is in the process of re-licensing its current customers, including the three companies from which ChoiceParts was born. "But we said that when this was finished, we'd discuss licensing information to them," he explains.
Cooney adds that ChoiceParts isn't helping the matter because it hasn't provided information DaimlerChrysler needs. "We've been asking them for data for several months now," he says. "This is the data we need...to decide whether we want to license to them."
Galbato says Choice Parts is not intending to cast any "negative aspersions" with the lawsuit and says he hopes the automakers turn out to be valuable partners. "ChoiceParts-over many months and multiple ventures-has made multiple attempts to amicably resolve these issues on standard commercial terms, but the defendams will not cease in their collective refusal to deal with ChoiceParts," he says.
Ford, GM and DaimlerChrysler had until Jan. 24 to file responses with the court. No additional information was available at press time, which was prior to the response deadline.
ChoiceParts was formed in May when CCC Information Services,The Reynolds & Reynolds Co. and ADP's Dealer Services and Claims Solutions groups together formed a separate company that enables repair shops to locate and order parts online.
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