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
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.
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Hytera Communications America (West), Inc.Kevin Nolan, +1
469-206-8170Director of MarketingKevin.Nolan@hytera.us