Global LMR Communications Provider Hytera Sues Motorola Solutions Under Sherman Antitrust Act Alleging Anticompetitive Practices That Force US Customers to Pay a Surcharge for Safety

05-Dec-2017 Intellasia | BusinessWire | 6:00 AM Print This Post

Motorola Solutions Harms Free Competition to Maintain Inflated Prices
in US for Mission-Critical Communications, Forces Dealers to Drop
Hytera’s Products, and Uses Sham Litigation to Damage Customer
Relationships, Says Hytera in District Court Filing

IRVINE, Calif.–(BUSINESS WIRE)–#AntitrustAct–Hytera Communications Corporation Ltd. today filed suit in federal
district court in New Jersey against Chicago, Ill.-based Motorola
Solutions, Inc., alleging that Motorola Solutions is engaging in
anticompetitive practices that are unlawful under the Sherman and
Clayton Acts by deliberately and actively foreclosing competition in
land mobile radio (LMR) communications systems, in order to reap
billions of dollars on sales at inflated prices to US customers.

Hytera’s complaint alleges that Motorola Solutions prevents Hytera from
competing in the US marketplace with its critical communications
products that offer best-in-class features and far better value to
public safety organizations, municipal governments, businesses, and
taxpayers. Hytera further alleges that Motorola Solutions maintains its
monopoly and enforces its inflated prices in the US by engaging in a
monopolistic scheme that includes forcing LMR dealers to drop Hytera’s
products, leveraging its dominance of the US public safety market to
impede adoption of newer, less expensive technologies here in the US,
and engaging in a serial pattern of sham litigation to impede Hytera and
interfere with its relationships with dealers and customers.

“Motorola Solutions is forcing US customers to pay artificially high
prices for critical communications. It can do this because of its
long-standing monopoly,” notes Tom Wineland, Director of Sales for
Hytera Communications America (West), Inc. “Motorola Solutions is doing
this as security risks in the US are increasing, with a growing need for
mission-critical communications solutions that help organizations to
protect important utilities, provide safety and services for public
transportation systems, and respond to threats at events such as
concerts, festivals, and sports events, even in our nation’s schools.
All these demands put pressure on organizational budgets, and in turn
are costing taxpayers and the American public.”

Shenzhen-based Hytera, Jersey City, N.J.-based PowerTrunk, Inc.,
Miramar, Fla.-based Hytera America, Inc., Irvine, Calif.-based Hytera
Communications America (West), Inc., and Cambridge, UK-based Sepura PLC
together allege that by foreclosing competition from Hytera’s DMR and
TETRA solutions, Motorola Solutions is able to maintain inflated pricing
in the US on its P25-compliant products. P25 is a technology standard
for public safety LMR in the US. TETRA, used by public safety
organizations and commercial businesses worldwide, offers similar
functionality and features to P25 equipment and can be significantly
less expensive, making it a compelling option for utilities and
transportation organizations and other commercial users in the US.
Hytera’s complaint provides the example of two competing professional
DMR handsets with similar features and functionality: Motorola
Solutions’ suggested retail price (MSRP) is as much as $738, nearly
twice Hytera’s MSRP of $440.

Hytera further alleges that Motorola Solutions is charging US customers
more than it charges customers in competitive markets outside the US.
Hytera gives an example that, even after Motorola applied discounts to
its list price, it charged the City of Chandler, Ariz., $5,290 for a
P25-compliant radio — nearly five times what a customer in the UK could
pay at retail for a comparable TETRA product. Hytera explains that US
customers and American taxpayers could realize significant savings from
competition from more cost-effective TETRA and DMR solutions that are
just as robust.

“The only thing this pricing adds up to is more profit for Motorola
Solutions — with taxpayers on the hook,” Wineland says. “Customers want
a choice, as reflected by the demand by public safety customers and
other US customers for DMR, a robust LMR alternative at a fraction of
the cost of P25.”

Hytera points out that Motorola Solutions has built a moat around the US
public safety market, making continuous efforts to stall acceptance in
the US of TETRA-compliant LMR. Hytera also notes that Motorola Solutions
has engaged in a pattern of intimidation of LMR dealers. “Motorola
Solutions brow-beats dealers into dropping Hytera’s products or face
losing the ability to sell Motorola Solutions’ products and service
lucrative maintenance contracts,” notes Andrew Yuan, Hytera’s President
of North and South America, based in Irvine, Calif.

“Hytera provides feature-rich, high-quality solutions at a competitive
price. Motorola Solutions is a monopolist charging US businesses a
surcharge for safety, and those costs are passed on to taxpayers and the
general public,” adds Mark Jordan, Regional Sales Manager for Hytera
Communications America (West). “Motorola Solutions is badgering dealers
to drop Hytera, preventing adoption of standards that would lower prices
for customers, and using courts to damage Hytera’s relationships with
LMR dealers and customers and raise our cost of doing business.”

Hytera details how Motorola Solutions has engaged in a pattern of sham
litigation and regulatory actions to raise costs for Hytera and sow
anxiety in the market, diminishing competition. This includes suing
Hytera for patent infringement on a set of standard essential
technologies that industry users have agreed to license on fair,
reasonable, and non-discriminatory (FRAND) terms, and for which Hytera
has already been paying Motorola Solutions to license.

“Customers in the US deserve the best critical communications equipment
and technology at the best prices,” adds Wineland. “Customers love
Hytera’s products—and the value they receive. American customers are
paying far more to Motorola Solutions and getting less, and Motorola
Solutions is working hard to maintain that unfair pricing regime here.”

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, 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.

About Hytera

Hytera Communications Corporation Limited is a leading global provider
of innovative professional land mobile radio (LMR) communications
solutions to governmental organizations, public security institutions,
and customers from other industries including transportation, oil and
gas, and many others around the world. Founded in Shenzhen, China in
1993 and listed on the Shenzhen Stock Exchange (002583.SZ), Hytera has
ten research and development centers around the world and has partnered
with companies in the U.S. since 2000. Hytera established its first U.S.
subsidiary, Hytera America, Inc., in 2004. It established Hytera
Communications America (West), Inc., in 2016. Hytera owns PowerTrunk,
Inc., and Sepura LLC, and has research and servicing facilities in
Schaumburg, Ill. More information is at www.hytera.com.

Contacts

Hytera Communications America (West), Inc.
Kevin Nolan, +1
469-206-8170
Director of Marketing
[email protected]

 


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