Amended Antitrust Complaint in New Jersey District Court Adds Lanham Act Charges, Alleges Motorola Solutions Has Deliberately Misled Dealers and Customers to Damage Hytera's US Land Mobile Radio Communications Business and Its Dealer Relationships
(Miramar, Fla. and Irvine, Calif. – Sept. 12, 2018) Global land mobile radio (LMR) communications company Hytera Communications Corporation Ltd., along with its US subsidiaries, Jersey City, NJ-based PowerTrunk, Inc., Miramar-Fla.-based Hytera America, Inc., and Irvine, Calif.-based Hytera Communications America (West), Inc. (collectively, "Hytera"), today learned that the federal District Court of New Jersey has granted Hytera's request to amend its antitrust complaint against Chicago, Ill.-based Motorola Solutions, Inc.
Hytera's amended complaint alleges that in addition to Motorola Solutions' seeking to enforce a monopoly in the US through exclusive dealing arrangements, Motorola Solutions' anticompetitive scheme includes a coordinated campaign of false rumors and misinformation seeking to damage Hytera's standing with dealers and customers. Hytera has added additional claims to its complaint based on New Jersey antitrust law and the federal Lanham Act.
Hytera's original complaint, filed on December 4, 2017, alleged that Motorola Solutions is engaging in anticompetitive practices that are unlawful under the federal Sherman and Clayton Antitrust Acts and under the unfair competition laws of California and Florida. Hytera alleged that Motorola Solutions is deliberately and actively foreclosing competition in LMR communications systems to reap billions of dollars on sales of such systems at inflated prices to US customers.
"With rising risks and constrained budgets, US customers looking for communications and security solutions deserve the opportunity to purchase feature-rich, high-quality systems at competitive prices," notes Tom Wineland, Vice President of Hytera Communications America (West), Inc. "Hytera gives them that opportunity. Our competitor instead seeks to enforce a monopoly to maintain its onerous pricing regime for outdated products."
Hytera's LMR communications products and solutions are used by commercial industries, including energy companies and utilities, event organizers and producers, security and emergency management response teams, schools and other educational institutions, and public safety organizations. Its products include portable and mobile terminals, transmission base stations, and dispatching and management software.
Hytera’s newly amended complaint asserts that Motorola Solutions' effort to maintain exclusivity in the US marketplace for LMR communications solutions is complemented by a campaign to induce fear in dealers and customers. Hytera represents Motorola Solutions' most significant competition in years, notes Hytera in its filing. As a consequence, Motorola Solutions has in 2017 and 2018 resorted to propagating false statements about Hytera's ability to continue selling product in the United States to cast fear, uncertainty, and doubt on Hytera's viability and ability to compete as an LMR supplier.
"Early in 2017, Motorola Solutions embarked on a deliberate campaign of misinformation and misstatements against Hytera," said Wineland. "That campaign has become more intense in 2018, as MSI continues to mislead and bully dealers that sell Hytera's products, in an effort to prevent them and their customers from doing business with Hytera."
"It is widely acknowledged by participants in the land mobile radio communications sector--including dealers who sell LMR products from all providers--that Motorola Solutions has engaged in anticompetitive behavior for decades to manipulate the market and maintain its monopoly," added Hytera's Wineland.
Hytera's amended complaint alleges that Motorola Solutions has made false statements to Hytera's customers and potential customers about Hytera's ability to compete, misrepresenting that Hytera is no longer permitted to sell or support its products in the United States. For example, Motorola Solutions has misrepresented the facts of an ongoing proceeding before the US International Trade Commission (ITC), spreading the false rumor that the ITC has issued an order blocking Hytera from selling to new customers or supporting existing customers, and even that Hytera's customers would have to return existing Hytera products purchased before the ITC action. The ITC has issued no such order.
Hytera notes in its amended complaint that exclusive dealers of Motorola Solutions' products account for substantial sales to end-customers in the LMR industry and that Hytera is aware of numerous such dealers who have repeated MSI's false statements about Hytera. Hytera argues that Motorola Solutions' use of its dealers to convey false information about Hytera has the direct effect of foreclosing Hytera from competing for customers on the merits.
Recently, multiple public statements were submitted to the ITC by independent LMR dealers in relation to the Commission's pending case. "These publicly-filed statements by independent LMR dealers demonstrate how bluntly misinformation is spread by our competitor," notes Hytera's Wineland. "Hytera's newly amended complaint reflects input from our dealers about this transparently manipulative behavior by Motorola Solutions."
The ITC announced on September 4, 2018, that it was granting Hytera’s petition to review substantial portions of an Initial Determination issued on July 3, 2018. The Commission called out for special attention in its Notice to Review the critical competition concerns of Hytera's dealers and requested the public provide further comments on these concerns.
"Hytera is in the US market to stay," adds Wineland. "Our competitor persists in making false statements even as we are determined to correct the misinformation that Motorola Solutions is spreading. While we continue to compete aggressively in the market, we are now also suing to bring an end to Motorola Solutions' unlawful, monopolistic conduct that prevents competition in the US in violation of federal and state laws and prevents US customers from purchasing at a reasonable price the LMR communications solutions they need to protect their business, facilities, employees, and the public."
Hytera's amended complaint in Hytera Communications Corp., Ltd., et al. v. Motorola Solutions, Inc., 2:17-cv-12445 (D.N.J.) alleges that Motorola Solutions has violated federal and state antitrust law by violating Sections 1 and 2 of the Sherman Antitrust Act and Section 3 of the Clayton Act, the Lanham Act, and the unfair competition and intentional interference laws of the states of New Jersey, California and Florida. Hytera is seeking damages and injunctive relief.
Hytera is represented by Noah Brumfield, Jason Zakia, Yi Ying, and Jeremy K. Ostrander of White & Case LLP and by Liza M. Walsh, Tricia B. O’Reilly, Marc D. Haefner, Katherine Romano, and Katelyn O’Reilly of Walsh Pizzi O'Reilly Falanga LLP.