Comdata a 'monopoly power', says new anti-trust litigation

Independent truckstop operators say FTC action hasn't stopped Ceridian-Comdata violations of Sherman Antitrust Act

Email | Print By Milt Capps

Comdata's Gary Krow

Comdata Corp. and parent Ceridian Corp. are being sued in federal court by two independent truckstop operators who hope to win class-action status for their complaints that Comdata operates as an unlawful monopoly.

The lawsuits argue that Comdata uses its dominance as a provider of trucker fleet cards illegally to charge independent operators far more for transactions than Comdata charges chain truckstop companies.

The complaints were filed this week in U.S. District Court for the Eastern District of Pennsylvania by Lief Cabraser Heimann & Bernstein LLP and other firms, in behalf of Marchbanks Truck Service Inc. and Universal Delaware Inc.  The plaintiffs ask treble damages for overcharges for themselves and for the proposed class of all independent truckstops, as well as an injunction to prevent what a Lief Cabraser statement described this morning as "ongoing anticompetitive conduct."

Comdata's profits, prowess and technology seem to keep the company in court: As recently reported by NashvillePost.com, Comdata has been the focus of disaffected Ceridian investors, who want high-flying Comdata spun off from laggard Ceridian; and, the target of lawsuits over patent infringement and related matters.

Today's Lief statement alleges Comdata developed its monopoly status by acquiring former transportation technology competitor First Data Corporation NTS in the Nineties; and, Trendar Corporation, which had until then marketed its Trendar system in competition with Comdata. The plaintiffs further claim that while Comdata charges such chains as Pilot, Petro and Travel Centers of America about 50 cents per transaction, independents are charged a percentage of the cost of diesel fuel purchases, leading to much greater outlays, putting the independents at a marked disadvantage to chains.

This week's complaints include a recitation of earlier Federal Trade Commission findings from investigation of similar complaints against Ceridian in the late Nineties, which culminated in a consent decree in which Ceridian agreed to change its practices and to license certain technology to potential competitors.

The lawsuit says the FTC intervention has proven ineffective and paints a picture of chain truckstops being complicitous in this matter.

A Lief Cabraser website supporting the action states this morning, in part, that Comdata uses market dominance "to impair the ability of rival card issuers to challenge Comdata's monopoly" in providing credit, debit, gift and loyalty cards. The plaintiffs argue the alleged behavior caused independent truckstop operators "to pay supracompetitive prices and/or fees and, thereby, to suffer antitrust injuries."

The plaintiffs ask for a jury trial; repayment of overcharges, trebled, plus interest; and, seek an injunction against Comdata's alleged practices. 

The suits aim to prove that Comdata violates the Sherman Antitrust Act by working to deny users of competing fleet cards access to its point-of-sale systems; to coerce chain truckstops from using competing cards, by employing prohibitions, surcharges and rebates; and, through other punitive sanctions. Plaintiffs explain that consumer-type transactions cards are not suitable for commercial transportation operations, because consumer cards don't typically provide "data capture and purchase controls" needed by truckers.

Ceridian spokesman Pete Stoddard told NashvillePost.com this morning the company would not comment on pending litigation. Calls to Brentwood-based Comdata CEO Gary Krow and inhouse attorney Lisa Peerman were not returned, but a spokesperson later said the company has not received the lawsuits and would have no immediate comment. Neither Lief lead lawyer Joseph Saveri nor fellow plaintiff's attorney David Balto has yet returned a reporter's call.