ACV files antitrust suit against several auto auction industry entities
ACV Auctions filed an antitrust complaint Friday in the U.S. District Court for the Western District of New York against the National Auto Auction Association, Auto Auction Services Corp., Manheim, ADESA, ServNet Auction Group and the Independent Auction Group.
This news was first reported by Automotive News on Tuesday.
In the filing, ACV alleges a “group of entrenched horizontal competitors …” referring to those traditonally offering physical-only auctions, “… have conspired to prevent competition from newer, more innovative online wholesale used vehicle auction platforms like ACV. ACV brings this antitrust action to stop this unlawful horizontal group boycott.”
Auto Remarketing has reached out for comment to ACV and each of the defendants via email.
“The NAAA is aware of and has retained counsel to review the lawsuit filed against it on Friday evening, August 26, 2022. NAAA has no comment regarding the matter at this time,” an NAAA spokesperson said via email.
In an emailed response, AutoIMS declined to comment, as did IAG, ACV and ServNet.
A spokesperson for ADESA US parent company Carvana declined comment.
A Manheim spokesperson said via email: “We cannot offer any information, as it would be inappropriate to comment on pending litigation.”
More details
The digital auction provider said in the complaint the defendants have “conspiring to limit ACV’s access to legacy inventory management software that most large-scale Commercial Consignors require Auction Service providers use.
“In particular, Defendants Manheim, ADESA, ServNet, and IAG have used their control over Defendants National Auto Auction Association, Inc. (“NAAA”) and Auto Auction Services Corporation (“AASC”) to deny ACV access to critical software called AutoIMS,” ACV said. “AutoIMS is the “industry standard inventory management platform” used by “[n]ational fleet management companies, lease companies, banks and finance companies … responsible for the remarketing of literally millions of off-lease vehicles each year.” Most Commercial Consignors exclusively use AutoIMS to track their inventory throughout the auction process. There are no other reasonable alternatives to AutoIMS. Even if a new platform was developed, many Commerical Consignors have built their entire operations around AutoIMS and would need to expend significant resources to adopt new processes to accommodate an alternative platform.”
ACV argues the defendants “have erected new restrictions” to keep the company from gaining an AutoIMS license.
NAAA members in good standing are automatically eligible for an AutoIMS license, ACV explains.
“But when in late 2018 Plaintiff ACV applied for membership in NAAA, its application was denied because ACV’s business did not conduct Physical Auctions,” the company said.
“That decision was made by the executive leadership and Board of Directors of NAAA, which at that time consisted of representatives from Defendants Manheim and ADESA, as well as members of Defendants ServNet and IAG,” ACV said. “These Defendants’ Physical Auctions have collectively benefitted from foreclosing potential competition by ACV for commercial consignment transactions.”
An AutoIMS license can be obtained directly through an application to AASC (a joint venture between Manheim, ADESA, ServNet and IAG), ACV said
“Despite having promised to license AutoIMS to anyone in the “entire auction industry”—a promise made to induce Commercial Consigners to adopt AutoIMS as the industry standard for inventory management—Defendant AASC has denied ACV’s request for a license,” ACV said.
Later in the complaint, ACV says commercial consignors have “repeatedly told” the company they can’t work with ACV since it does not have AutoIMS access.
“Because Commercial Consigners use AutoIMS for inventory management, they are unable to use their existing systems to manage and monitor their inventory on the ACV platform. One Commercial Consignor told ACV that ‘once you figure out how to use AutoIMS, we will be happy to integrate with you,’” ACV said.
The company added: “Once ACV realized AutoIMS was necessary to do business with Commercial Consignors, ACV sought access to AutoIMS. But, despite promises that AutoIMS would be broadly licensed to the entire wholesale auto industry, Defendants Manheim, ADESA, ServNet and IAG—collectively and through Defendants NAAA and AASC—have conspired to block ACV from obtaining access to AutoIMS.
“Recognizing ACV’s success in competing for dealer-to-dealer transactions, those Defendants—all of whom are either horizontal competitors, or groupings of horizontal competitors (to each other and ACV)—have implemented and engaged in an illegal anticompetitive conspiracy to improperly exclude competition for Commercial Consignors’ used car auctions. Defendants’ unlawful conspiracy is intended to artificially insulate them from competition, further entrench themselves against innovators like ACV, and deny Commercial Consignors, auto dealerships, and consumers the demonstrated benefits of the competitive process.”
Auto Remarketing will have more details on this story as it develops.