Location Services Loses to DRN Again with the Court Noting “[A]ntitrust laws were enacted for ‘the protection of competition, not competitors’”
FORT WORTH, TX – NOVEMBER 9, 2018 – Digital Recognition Network (DRN), an AI and data analytics company that provides vehicle location data and analytics to auto lenders, insurance carriers and other commercial verticals, today announced that on November 5, 2018, a U.S. District Court Judge in the Northern District of Texas ruled in its favor and dismissed an antitrust case brought by Location Services, LLC.
“We are pleased with the Court’s decision and are grateful for its time and attention to the application of the facts and the law in this case,” said Todd Hodnett, Executive Chairman and Founder of DRN. “But the truth is: our judicial system never should have been burdened by such a frivolous lawsuit. Since the moment this suit was filed, DRN has adamantly maintained that it was nothing more than a marketing campaign disguised as an antitrust lawsuit. The timing of the suit was suspect, as it was filed just days before the largest repossession conference in the U.S. Plus, its complaint read more like a marketing slick sheet for its products and services than a legal complaint. We feel vindicated by the Court’s ruling.”
In the case, Location Services asserted that DRN “is violating antitrust laws by unlawfully maintaining monopoly power in the market for license plate recognition (‘LPR’) data used for vehicle repossessions and recoveries.” Specifically, Location Services alleged “DRN’s dominance stems from its large network of vehicle repossession agents and its prohibition against those agents working with competing LPR providers for a full year after they terminate their contract.” The Court cast aside Location Services’ arguments, finding that its allegations were speculative, conclusory and did not have any factual support.
With regard to Location Services’ claim that DRN has a monopoly on the LPR market, the Court agreed with DRN that it lacks the requisite power to exclude competitors from collecting LPR data and that “nothing prevents [Location Services] from collecting the same information.” It noted that Location Services “admits that [DRN] was the first to develop and market the product,” and further observed that DRN has built up its network of agents “[t]hrough its hard work, superior product and business acumen.”
In addition to being speculative, the Court concluded that Location Services’ arguments in this regard “make no sense.”
Moreover, the Court noted that “[a]ntitrust laws were enacted for ‘the protection of competition, not competitors’”, and agreed with DRN that Location Services’ own allegations demonstrated no harm to competition: “The paragraphs of the complaint to which [Location Services] cites do not support its contention that competitors have been harmed. For example, [Location Services’] own allegations show that one competitor has grown market share.”
“We have already put this case in our rearview mirror and remain committed to offering superior value and continuing to invest in technology, systems and customer service processes that benefit recovery agents, and continuing to pay those agents industry-leading revenue shares,” added Hodnett.