Sacramento, CA – 12 April 2018 – Location Services, LLC, dba; “Pathfinder Services” has filed an antitrust lawsuit by jury trial in the United States 9th Circuit Eastern District of California against Digital Recognition Network, Inc. case#2:2018cv00893. In the complaint, Location Services, LLC, alleges that Digital Recognition Network, Inc. holds an unfair monopoly over themselves and, namely, MVTRAC.
Read The Filed Complaint Here!
In the complaint, Location Services, LLC, alleges; “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. Any agent wishing to terminate with DRN is forced to lose, for an entire year, the substantial amount of money it had been earning by collecting LPR data and repossessing vehicles using that data. As a result, agents are not willing to leave DRN’s network.”
DRN’s alleged dominance comes from a claimed 70% of all LPR data collected using their cameras and has created a market barrier to new competition according to Location Services, LLC; “Because DRN’s agent network is foreclosed from other competitors, other LPR providers are unable to expand their output in the short term and increase their market share. Because DRN’s agent network is so much larger than any other competitor, and because it has locked up so many of the high-value vehicle repossession agents, other LPR providers will only continue to lose market share if DRN’s exclusionary non-competition restrictions are not enjoined.”
Location Services, LLC, alleges the root of this dominance comes from contractual non-competition clauses forbidding agents from partaking in other services for one year post termination of their DRN contract that is overly broad in nature; This non-competition provision imposes an unreasonably broad restriction on the nature of an agent’s work with other companies. For example, it prevents, for one full year after termination, even a low-level employee of a vehicle repossession agent from rendering any services (such web design) to a company planning to become an LPR provider at some point in the future. It also prevents a vehicle repossession agent, during the term of the contract and for a full year thereafter, from providing skip tracing services for a competitor that also uses LPR technology.
DRN denies the allegations and has provided the following statement:
“First and foremost, the allegations Location Services sets forth against DRN are patently false and appear to be the desperate attempt of a struggling company to shift blame for the results of its own failure to implement and execute a competent business plan. It is not DRN’s fault that under new private equity ownership, Location Services is currently down to 15 LPR kits in the field from the more than 120 kits the prior owner previously claimed to have. In fact, if one reads the full complaint, it’s clear this is a marketing campaign disguised as an antitrust lawsuit. The timing is inherently suspect: just a few days before the largest repossession conference in North America. Additionally, Location Services gratuitously inserts assurances and promises about its hardware quality, customer service and pricing throughout the complaint; things more appropriate for a marketing sell sheet than a complaint in federal court.
DRN remains 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. DRN does not engage in anticompetitive practices, and the last antitrust lawsuit against DRN was summarily dismissed by a federal judge. DRN is confident that Location Services’ claims will fare no better this time around.”
Jeremiah Wheeler,
EVP & GM, FinTech,
Digital Recognition Network
A Status (Pretrial Scheduling) Conference is set for August 16, 2018 at 02:30 PM before Judge Kimberly J. Mueller.
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