Firm Sued Over Its System for Tracking Stolen Cars

Lo-Jack Corp., which last month won a contract to provide the Los Angeles Police Department with an electronic stolen car tracking system, was sued by a competing firm in Los Angeles federal court Monday for allegedly engaging in monopolistic practices.

The suit, filed by Clifford Electronics Inc. of Chatworth accuses Lo-Jack, based in Braintree, Mass., of violating antitrust laws by refusing to share its electronic technology with competing firms.

Lo-Jack--which produces a vehicle recovery system using antennaes, tracking devices in police cars and electronic transponders hidden in private automobiles--won City Council approval last month to donate $1 million worth of tracking equipment to the Police Department in exchange for the right to sell transponders to the public.

Under terms of the city contract, Lo-Jack could sell its transponders for about $600 each after installing antennaes and providing 350 tracking devices to the LAPD and the Los Angeles County Sheriff’s Department.

Critics, led by competing auto security firms, have charged that Lo-Jack’s system is monopolistic, because no other company has the same electronics system to duplicate the transponders made by the Massachusetts firm.

But supporters of the contract, including Police Chief Daryl F. Gates, have argued that rival firms can also compete for the Los Angeles market once they develop operating systems of their own.

Lo-Jack initially tried to market its system, now operating in Massachusetts and Florida, at the state level, but legislation authorizing the firm to begin operations was allowed to die in Sacramento after an amendment that would have forced the firm to share its technology.

In the lawsuit filed Monday, lawyers for Clifford Electronics charged that under the current contract Lo-Jack can charge consumers “inflated, supracompetitive prices” for transponders.

“Without legitimate business justification and motivated by a desire to reap monopolistic profits, Lo-Jack’s actions prevent other parties, including Clifford, from interfacing competing transponders with the equipment supplied by Lo-Jack to the LAPD,” the lawsuit alleges.

Clifford Electronics, which also produces auto security systems, asked for a preliminary injunction to stop Lo-Jack’s operations in Los Angeles and an order mandating competition in the city’s efforts to obtain an electronic stolen car recovery system.

Spokesmen for the LAPD and Lo-Jack declined comment on the lawsuit.