Hytera accuses Motorola of anti-competitive practices


Tuesday, 05 December, 2017


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A legal suit has been filed by Hytera Communications Corporation Ltd against Motorola Solutions Inc.

Hytera is alleging that Motorola has engaged in anti-competitive practices that are unlawful under the Sherman and Clayton Acts.

Motorola is accused of deliberately and actively foreclosing competition in land mobile radio (LMR) communications systems in order to gain 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 organisations, 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 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 longstanding monopoly," said Tom Wineland, director of sales for Hytera Communications America (West).

"Motorola Solutions is doing this as security risks in the US are increasing, with a growing need for mission-critical communications solutions that help organisations 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 organisational budgets, and in turn are costing taxpayers and the American public."

Shenzhen-based Hytera, Jersey City-based PowerTrunk, Inc., Miramar-based Hytera America, Inc., Irvine-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.

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 $5290 for a P25-compliant radio — nearly five times what a customer in the UK could pay at retail for a comparable TETRA product.

"The only thing this pricing adds up to is more profit for Motorola Solutions — with taxpayers on the hook," said Wineland.

"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 has accused Motorola Solutions of engaging 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," said Andrew Yuan, Hytera's president of North and South America.

Hytera believes 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.

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.

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