Requiring Creation of Computer Code Doesn’t Violate the First Amendment
From Judge G. Murray Snow’s decision Wednesday in CDK Global LLC v. Brnovich (D. Az.):
Plaintiffs CDK Global LLC and Reynolds and Reynolds Company … develop, own, and operate proprietary computer systems known as dealer management systems (“DMSs”) that process vast amounts of data sourced from various parties. Automotive dealerships hold licenses to DMSs to help manage their business operations, including handling confidential consumer and proprietary data, processing transactions, and managing data communications between dealers, customers, car manufacturers, credit bureaus, and other third parties. Plaintiffs employ multiple technological measures—such as secure login credentials, CAPTCHA prompts, and comprehensive cybersecurity infrastructure, hardware, and software—to safeguard their DMS systems from unauthorized access or breach. Plaintiffs also contractually prohibit dealers from granting third parties access to their DMSs without Plaintiffs’ authorization.
In March 2019, the Arizona Legislature passed the Dealer Data Security Law (“the Dealer Law”)…. The Dealer Law regulates the relationship between DMS licensers like Plaintiffs and the dealerships they serve. Under the Dealer Law, DMS providers may no longer “[p]rohibit a third party [that has been authorized by the Dealer and] that has satisfied or is compliant with … current, applicable security standards published by the standards for technology in automotive retail [(STAR standards)] … from integrating into the dealer’s [DMS] or plac[e] an unreasonable restriction on integration ….” The Dealer Law also requires that DMS providers “[a]dopt and make available a standardized framework for the exchange, integration and sharing of data from [a DMS]” that is compatible with STAR standards and that they “[p]rovide access to open application programming interfaces to authorized integrators.” Finally, a DMS provider may only use data to the extent permitted in the DMS provider’s agreement with the dealer, must permit dealer termination of such agreement, and “must work to ensure a secure transition of all protected dealer data to a successor dealer data vendor or authorized integrator” upon termination….
Plaintiffs allege the Dealer Law abridges their freedom of speech in two wa
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