Feds Reject CDK's Purchase of Auto/Mate

The Federal Trade Commission said Tuesday that CDK Global Inc. had abandoned its planned purchase of fellow automotive dealer software vendor Auto/Mate Dealership Systems after the agency filed an administrative complaint alleging their tie-up would “reduce competition in an already concentrated market,” according to Law360.

According to the FTC’s announcement, had CDK acquired Auto/Mate, it would have further expanded its lead as the U.S.’ strongest dealer management system, or DMS, software provider. New-car dealers, the FTC said, use that software “to manage nearly every aspect of their business.”

Automotive News said CDK and Auto/Mate signed an agreement last April outlining terms of a sale that was subject to FTC approval, Auto/Mate said. But after an 11-month review, Auto/Mate said “the FTC decided that it was in the best interest of auto dealers to have Auto/Mate remain as a strong competitor in the marketplace.”

Auto/Mate said the FTC dug into documents from CDK and Auto/Mate and spoke to a variety of industry players, including dealers, competing companies, consultants and CDK employees, as well as Auto/Mate CEO Mike Esposito and Larry Colson, the Albany, N.Y., company's managing partner.

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