Automotive, Industry Ideas, Insights

What Internet Explorer teaches us about car dealership technology

By Motoinsight - May 14, 2020

On May 18, 1998, the U.S. Department of Justice filed an antitrust lawsuit against Microsoft on the grounds that packaging Internet Explorer with Windows installations was eroding the competitive landscape by obstructing other software companies. Two years later, the DOJ ruled that Microsoft would be divided in half, severing its operating system side from the software side.

More recently, courts in Europe and the United States have followed in that approach, considering penalties and judicial action against tech giants like Google and Facebook to limit their monopolistic ambitions. But these anti-competitive practices aren’t unique to the multibillion-dollar companies we see in the news every day.

Even in the automotive reatail industry, there exist companies who use their position of dominance to exclude other vendors from participating. By creating barriers to entry including artificial fees, these companies can reduce your options or make your preferred software integration arbitrarily expensive. This unfairly limits dealership choices and slows the rate of progress in the industry, all so a couple large companies can force you to use their potentially inferior products.

What’s the true danger here?

As you well know, a free market can encourage competition between companies, resulting in better products for the customer. Because different companies tend towards different areas of expertise, you may find that one software provider offers the best websites, while another offers the best digital retailing, and even another offers the best service department solution.

Because of this, an integrated solution between multiple software vendors can often provide the best end-user experience. As a dealer, you rely on the compatibility between your finance widget or digital retailing platform and your website provider in order to have the best of all worlds. Some software providers know this, and they use it against you.

If so-motivated, website providers can (and do) block digital retailing providers from their ‘sites, or charge dealers an extra fee simply to use a third party digital retailing platform. Then, having put the competition at an unfair disadvantage, the website providers can (and do) promote their own digital retailing solutions. The anti-competitive practices would exclude superior digital retailing options from the dealer, forcing them to settle for something that may be subpar.

How can you fight back?

This all comes down to choice: your choice. Software will continue playing a larger and larger role in dealerships’ success, and you can’t afford to have your choices limited by anti-competitive practices. When evaluating new software (or even existing software), always inquire about the freedom and cost to integrate with other solutions and providers. There’s no bigger red flag than a platform which only integrates freely with that same company’s other products.

We have a great article about how to choose the best dealership management software for your dealership, for instance.

Crucially, be aware that there are many choices to satisfy any one of your needs. Many website providers offer unrestricted integration with any digital retailing platform on the market; many CRMs integrate seamlessly with service department software. No matter what you’re looking for, there is an option that makes integration easy, no matter who makes the other software.

Despite losing their lawsuit, Microsoft appealed the Internet Explorer ruling and continue operating largely unhindered. It didn’t matter, though, because Internet Explorer simply wasn’t the best product. Consumers rejected Microsoft’s attempts to force a subpar web browser on them, and turned to alternatives like Firefox, Chrome, and Opera. In 15 years, Internet Explorer dropped from 95% market share down to a negligible 2.29% in 2019. You have the power to say ‘no’ to anti-competitive companies and inadequate solutions.

You have the power to get what you want for your car dealership.

Ready to sell more cars? See how your dealership can thrive online today.

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