Diebold sued by independent ATM repair firms
19 October 2004 | 6254 views | 0
ATM maintenance companies in the US have filed an anti-trust suit against Diebold, "to ensure that automatic teller machine owners of all sizes continue to have freedom of choice in choosing an independent company to service their ATMs and to seek an end to unfair market practices that restrict competition".
The complaint - filed by the Financial & Security Products Association in US District Court, Northern District of California, San Francisco, on behalf of its more than 300 members - states that Diebold, the largest manufacturer of ATMs, has instituted policy changes "that maintain and extend its monopoly position in the markets for service associated with the maintenance of Diebold ATMs in the US."
The complaint specifically asks the court for a preliminary and permanent injunction to stop the ATM manufacturer from forcing third party firms to deal direct with Diebold for spare parts or licensing diagnostic software/information. The complaint also asks the court to rescind Diebold policies "that give the company an unfair advantage by requiring that only Diebold technicians perform the hardware or software installations on Diebold ATMs".
John Vrabec, executive director of the Financial & Security Products Association, charges: "Diebold has changed its policies regarding diagnostics and spare parts in such a way that it is abusing its dominant position with its installed base of customers and is prohibiting these customers from using any maintenance company other than Diebold for installation and service."
Previously, according to the Financial & Security Products Association complaint, Diebold's policies permitted third-party maintenance companies to service Diebold-brand ATMs, and offered easier access to the manufacturer's diagnostics.
But, according to the complaint, Diebold "is now requiring that its installed base of customers desiring an upgrade purchase new ATM keyboards and encryption software only from Diebold. Diebold is also requiring that a Diebold technician perform the installation."
"This lack of competition is leading to higher prices and lower-quality service in the ATM maintenance market," Vrabec says. "If this is not corrected, the independent companies selling and servicing financial security equipment will begin to be severely affected, which, in turn, will cause higher ATM servicing fees for financial institutions and other ATM owners."
He says that compared to the service programmes offered by the manufacturers, third-party maintenance companies can typically provide an ATM owner with savings that range from 25% to 33%.