A Trade Group for ATM Servicers Asks for Diebold Injunction

The Financial & Security Products Association, Albuquerque, N.M., has filed a motion for a preliminary injunction against Diebold Inc. as part of an antitrust suit the 307-member trade group filed in October against the North Canton, Ohio-based ATM manufacturer. The motion asks Judge William H. Alsup of the U.S. District Court for the Northern District of California to order Diebold to return to parts and maintenance policies it followed before 2004. New Diebold policies, which the FSPA says are unfairly restrictive of ATM owners and third-party servicers, sparked the trade group's suit. The latest filing, which follows talks between the FSPA and Diebold that an FSPA spokesman says “went nowhere,” asks for a May 26 preliminary hearing. In is earlier complaint, the FSPA, which represents ATM parts dealers and servicers among other third-party maintenance companies, alleged Diebold prevents third parties from installing machine upgrades, such as those that bring ATMs into compliance with new card network rules requiring Triple DES encryption. It further said Diebold uses password-protected software to restrict third-party companies from servicing installed upgrades, and restricts access to advanced diagnostics on its new Opteva line of ATMs. The original complaint also said Diebold controls 90% of the parts and service market for its machines. The new motion says Diebold maintained no such restrictions on third parties before 2004 and asks the court to order the company to return to the older policies. It also asks that the company restore a policy of hold-harmless agreements under which third parties could gain access to diagnostic software, if the ATM owner so chose. “It is important to note that we are not asking for any monetary damages with this motion, which is only for an injunction that the ATM parts and services business remain an open and level playing field where the customer can choose who they wish to service their ATMs,” said John M. Vrabec, executive director of the FSPA, in a statement. “We are asking the court for a preliminary injunction as soon as possible because Diebold's new policies threaten to and will put FSPA's members out of the parts and service business.” In a statement it sent to Digital Transactions magazine after the FSPA filed its original suit, Diebold said its customers may have any compatible upgrade from any source installed by any third party. It said its own upgrade must be installed by Diebold. It also said once it installs the upgrade, the customer may choose any party to maintain the ATM. The statement, beyond which Diebold was unwilling to comment, made no mention of password-protected software (Digital Transactions, January-February).