Hytera sues Motorola Solutions for anticompetitive behavior, hampering access to dealers

Meanwhile, the Hytera litigation cites numerous examples of dealers that allegedly were threatened by Motorola Solutions for selling Hytera products or considering the possibility of selling Hytera solutions.

“A representative of a South Carolina dealer informed Hytera that they were terminated by MSI as a service and maintenance partner, and that the dealer believes that this action was taken—at least in part—as retaliation for the South Carolina dealer’s decision to sell Hytera products,” according to the Hytera lawsuit. “The South Carolina dealer expects the next step may be that MSI will terminate their dealership relationship entirely, because they were told by an MSI representative that MSI did not like the fact that the dealer was selling other manufacturers’ products, especially Hytera products.

“On information and belief, the South Carolina dealer understands that other MSI dealers have similarly been threatened with having their service partnership terminated, if they chose to continue selling Hytera products.”

Hytera’s lawsuit also cites a similar situation in California.

“Yet another dealer operating in California sought to add Hytera product in addition to MSI products that it already sold,” the Hytera complaint states. “When it did so, MSI terminated the dealer. Not content with terminating the dealer, MSI made the termination very public so as to magnify the effect—the termination served as a very public reminder to other dealers to not cross MSI and add a competing product line.”

Such tactics have made it difficult for Hytera to maintain its 200-plus existing dealers and to cultivate relationships with new dealers, according to Jordan.

“When you are prospecting a potential Motorola Solutions dealer, how deep of a relationship they have will affect your ability to even entertain an idea of Hytera becoming another part of their line card,” he said.

Hytera’s complaint also alleges that Motorola Solutions uses its dominance in the public-safety communications market—notably, its ability to direct lucrative public-safety service contracts to favored dealers—as leverage to persuade dealers not to offer Hytera DMR products to potential non-public-safety customers.

“If an MSI Manufacturer’s Representative chooses to carry competing products, MSI has the ability to—and does, in fact—re-assign these lucrative service accounts away from dealers that choose to carry competing products,” according to the Hytera lawsuit. “On information and belief, MSI has threatened numerous dealers with termination of their Manufacturer’s Representative status if they chose to carry competing Hytera products.

“Most importantly, MSI is able to leverage these relationships with dealers to prevent dealers from selling competing products for any purpose, whether it is to public-safety customers, private utilities, or commercial customers.”