The First Amendment and Mandated Creation of Computer Code
From CDK Global LLC v. Brnovich, decided last week by Judge Grant Murray Snow (D. Ariz.):
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 … 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 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, in
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