AUGUST 2008

Copart files antitrust lawsuit

Copart, Inc., an online vehicle remarketing company, filed an antitrust lawsuit ­ alleging that Auto Auction Services Corporation (AASC) is restraining competition and stifling innovation by denying Copart access to an essential electronic network called AutoIMS.

AutoIMS is an electronic vehicle inventory management system owned and operated by AASC, which in turn is owned and controlled by a consortium of major vehicle remarketing firms which compete with Copart, including Manheim Auctions, Inc., ADESA, Inc., and other members of the National Auto Auction Association.

A vehicle remarketing company like Copart must have access to AutoIMS in order to receive and accept assignments of vehicles for resale from banks, finance companies, and fleet operators. Yet when Copart recently requested access to AutoIMS in order to effectively compete in that market, AASC insisted Copart pay discriminatory access fees, including an initiation fee of $50,000 per location. Because Copart operates over 130 locations in North America, that fee would exceed $6.5 million — a discriminatory demand equal to denying access altogether.

Copart also claims that other companies in direct competition with Copart such as Manheim and ADESA paid a nominal initiation fee for access to AutoIMS.

The suit was filed in the United States District Court for the Northern District of California.