Who Really Faces Antitrust Risk in Collision Repair? Part One Are Repairers Really the Antitrust Risk?

by Sean Preston, Managing Attorney, Coverall Law

Right now, many collision repair shops are seeing something unusual – and troubling.

Customers are paying more out of their own pockets. Repair procedures that were routinely approved just months ago – especially certain OEM-required steps – are now being denied. Vehicle owners are increasingly forced to choose between paying extra or leaving work undone. That pressure lands squarely on both the consumer and the repairer.

Recent industry reporting has brought these developments into sharper focus. In a widely discussed article, California body shop manager and Society of Collision Repair Specialists (SCRS) Board member, Andrew Batenhorst, detailed what he and many others have observed: heightened adjuster scrutiny, increased reliance on AI audits and growing emphasis on subrogation recovery performance. His piece does not make legal accusations; it does something more important. It identifies patterns – patterns that raise legitimate questions about how claims decisions are being made.

Whenever words like “price fixing,” “market suppression” or “anti-competitive behavior” enter the conversation, however, a familiar anxiety surfaces inside the collision repair community. Associations grow cautious. Shop owners grow quiet. Conversations become guarded. For years, this industry has operated under the shadow of antitrust fear.

Which leads to a critical threshold question:

Are collision repair shops truly at risk of violating antitrust law – or has the industry misunderstood where that risk actually lies?

This article is the first of a two-part series examining where antitrust exposure genuinely exists in the collision repair marketplace. Part One focuses on a question many shop owners quietly ask but rarely say out loud:

Are we the ones at risk?

To answer that, we must first understand how antitrust anxiety took hold in this industry in the first place.

The Industry’s Antitrust Anxiety: How Fear Took Hold

For many years, collision repair shops have worried about breaking antitrust laws. Shop owners often feel nervous when they attend association meetings or talk about labor rates. They know that antitrust laws are serious, and they do not want to do anything wrong.

Part of this fear comes from stories told over time. Some insurers have described shops as if they are trying to “fix rates” or act together to push prices higher. Even when shops are simply talking about common problems, those discussions have sometimes been framed as if they were secret agreements. That kind of language sticks, and it creates concern.

Over time, something else happened. Lawful advocacy – like speaking up about low reimbursement rates or unfair steering – started to feel risky. Shops began to worry that even raising concerns could be seen as illegal collusion. But there is a big difference between talking about industry challenges and agreeing to set prices together.

Because of this fear, many shop owners have grown quiet. They avoid open conversations. They hesitate to educate customers about their rights. This “chilling effect” does not help consumers or the industry. It simply creates confusion about what the law actually allows.

Antitrust 101 (Without the Myths): What the Law Actually Requires

Before anyone can decide who is at risk, we need to understand what antitrust law actually says. There are many myths about antitrust rules. Some people think that if competitors talk in the same room, they are breaking the law. Others think that charging higher prices automatically creates an antitrust problem. That is not how it works.

Antitrust laws are meant to protect fair competition. They are not meant to control prices or punish businesses for trying to survive. Two main federal laws guide this area: the Sherman Act and the Clayton Act.

The Legal Threshold for Antitrust Liability

The Sherman Act makes it illegal for competitors to agree to fix prices, divide markets, rig bids or boycott others. The key word is agree. The law focuses on coordinated action between competitors.

The Clayton Act allows private parties to sue if they were harmed by conduct that violates antitrust laws. But a lawsuit does not succeed just because someone is unhappy. The person bringing the case must prove real harm.

This leads to one of the most important rules in antitrust law: there must be actual injury and damages.

It is not enough to say, “This feels unfair.” A plaintiff must show:

•  There was illegal conduct.

•  The conduct caused real harm.

•  The harm affected their business or property.

Without proof of injury, there is no successful antitrust claim.

This is where many fears in the collision repair industry begin to fade. There is a major difference between: unilateral, independent conduct (lawful) and concerted action among competitors (potentially unlawful).

If a shop decides on its own to raise its labor rate, that is lawful.

If a shop independently decides not to join a DRP, that is lawful.

If a shop independently follows OEM repair procedures, that is lawful.

Even if many shops reach similar decisions at the same time, that is not automatically illegal. Businesses can respond to the same market pressures in similar ways. That alone does not prove an agreement.

The problem only begins when competitors agree – directly or indirectly – to act together in a coordinated way.

Antitrust Injury and Proof of Harm

Even if someone claims there was an agreement, the case is not complete. The plaintiff must also prove “antitrust injury.” This means real, measurable harm caused by the illegal conduct.

There are two parts to this:

1. Fact of Damage

The plaintiff must show that harm actually happened. This cannot be a guess. It cannot be based on fear or prediction. There must be proof that money was lost or business was damaged because of the alleged conduct.

2. Amount of Damage

Once harm is proven, the amount can be estimated in a reasonable way. Courts understand that damages are not always exact. But there must first be solid proof that damage occurred in the first place.

The law does not allow cases based on theoretical harm. It does not allow lawsuits based on “what might happen.” Speculation is not enough.

This is another reason most everyday shop behavior does not create antitrust liability.

When independent shops set their own prices, choose their own repair standards and make their own business decisions, there is no agreement. Without an agreement, there is usually no violation. And without real proof of injury caused by illegal coordination, there is no successful private lawsuit.

Understanding these basics helps calm much of the anxiety in the collision industry. Antitrust law is serious – but it is also specific. It requires proof. And in most cases, independent collision repair businesses operating on their own judgment do not meet that legal threshold.

Why Collision Repair Shops Rarely Trigger Antitrust Liability

Many shop owners worry that simply talking about labor rates or pushing back against low insurer payments could lead to an antitrust claim. In reality, most independent collision repair shops operate well within the law. The key reason is simple: they make their own decisions.

Antitrust law is focused on stopping competitors from acting together in ways that harm competition. It is not designed to punish individual businesses for making independent choices about how to run their operations.

Independent Decision-Making Is the Safe Harbor

The safest place under antitrust law is independence.

When a shop sets its own labor rate based on its costs, training, equipment and local market conditions, that is lawful. Every business has the right to decide what it must charge to remain profitable and provide safe repairs. There is nothing illegal about charging more if expenses rise or if higher skill levels justify it.

The same is true for Direct Repair Programs (DRPs). A shop may decide, on its own, that a DRP does not pay enough or requires terms that do not fit its business model. Choosing to decline participation is a lawful, independent business decision. Antitrust problems arise only if shops agree with one another to refuse participation as a group.

The same principle applies to performing OEM-required repairs. If a shop decides to follow manufacturer repair procedures – even when an insurer refuses to pay – that is a safety and liability decision. It is made to protect the customer and the business. That independent choice does not become illegal simply because other shops may reach the same conclusion.

Independence is the shield. As long as each shop decides for itself, based on its own judgment and circumstances, antitrust law is generally not triggered.

Parallel Conduct Is Not the Same as Collusion

One of the most misunderstood ideas in antitrust law is something called “conscious parallelism.”

This term describes a situation where businesses behave in similar ways because they are responding to the same market pressures – not because they agreed to act together. For example, if several shops raise labor rates around the same time due to rising costs for materials, equipment and skilled technicians, that is parallel conduct. It is not automatically illegal.

Courts understand that competitors often react in similar ways when facing similar challenges. Similar pricing outcomes do not prove an agreement. There must be evidence that the competitors actually communicated and decided to act together.

This is where three elements become critical:

•  No agreement.

•  No coordination.

•  No enforcement mechanism.

If there is no proof that shops agreed on prices, coordinated their decisions or enforced compliance among themselves, then there is usually no antitrust violation.

Simply put, similarity is not conspiracy.

Understanding this difference helps calm much of the fear in the industry. Independent businesses can arrive at similar answers without ever crossing legal lines. Antitrust law requires proof of cooperation – not coincidence.

Lawful Advocacy vs. Illegal Collusion: The Bright-Line Distinction

One of the biggest sources of confusion in the collision repair industry is knowing where advocacy ends and collusion begins. Shops have the right to speak up. They have the right to protect their businesses. But they must do so in a way that stays within the law.

The difference comes down to one key question:

Are shops acting independently, or are they agreeing to act together?

That is the bright line.

Lawful Conduct

There are many actions that are fully lawful, even if they make insurers uncomfortable.

Shops may educate consumers about steering. They can explain that customers have the right to choose their repair facility. They can describe the risks of improper repairs. They can talk about why OEM procedures matter for safety. None of this is illegal. It is consumer education.

Shops may also share non-pricing, non-competitive information. For example, they can discuss general industry trends, new repair technologies, training opportunities or safety standards. They can talk about how claims are being handled in broad terms, as long as they do not exchange specific pricing strategies or agree on how to respond.

Discussing regulatory concerns and insurer practices is also lawful. Associations can raise questions about claim denials, subrogation trends or steering practices. They can advocate for clearer rules and fair treatment. Speaking to lawmakers or regulators about industry problems is protected activity.

Shops can also encourage independent decision-making. An association may remind members to carefully evaluate whether a DRP works for their business. It may stress that each shop must determine its own labor rate. The key is that every decision must be made separately, based on that shop’s own judgment.

Independent action is legal. Open discussion of problems is legal. Advocacy for fairness is legal.

Prohibited Conduct

Problems arise when independent thinking turns into agreement.

Agreeing on labor rates or setting “minimum” prices is illegal. Even if shops believe the rates are too low across the board, they cannot agree to charge the same number or refuse to go below a certain amount. Each shop must decide its own pricing without coordination.

Collective refusals to deal with a specific insurer can also create serious risk. If competitors agree that none of them will work with a particular carrier, that may be viewed as a group boycott. Antitrust law treats that kind of agreement very seriously.

The same is true for coordinated DRP boycotts. A shop can independently decline to participate in a DRP. But shops cannot organize and agree as a group to reject a program in order to pressure an insurer.

Sharing confidential pricing or cost data is another danger area. Detailed information about labor rates, profit margins, cost structures or negotiation strategies should not be exchanged among competitors. That type of information can be used to support claims of coordination.

The bottom line is simple:

Shops may speak. They may advocate. They may decide what is best for their own businesses.

What they may not do is agree with competitors on how to compete.

The Role of Trade Associations — and Why Antitrust Warnings Matter

Trade associations play an important role in the collision repair industry. They give shop owners a place to learn, share ideas and speak with a stronger voice. But because associations bring competitors together, they must be careful. Antitrust law pays close attention to groups of competitors meeting in the same room.

Understanding why associations are sensitive – and how to manage that risk – helps protect both the group and its members.

Why Associations Are High-Risk Environments

First, association meetings bring competitors together. Even if everyone has good intentions, the simple fact that business rivals are talking can raise legal concerns. Antitrust law focuses on agreements between competitors. So when competitors gather, regulators may look closely at what was said.

Second, informal conversations can easily be misunderstood. A comment like, “Nobody should accept that rate,” may be meant as frustration. But written in meeting notes or repeated later, it could be described as a call for collective action. Context can get lost. Words matter.

Third, insurers and regulators sometimes review association materials during disputes or investigations. Meeting minutes, emails, newsletters and even text messages can be examined. A poorly worded discussion about “market rates” or “refusing to deal” could be taken out of context and used to suggest coordination – even if none existed.

Because of these realities, associations must be disciplined, not because they are doing something wrong, but because perception matters in antitrust law.

Antitrust Warnings as a Best Practice

This is where an antitrust compliance statement becomes important.

An antitrust warning is a short statement read at the beginning of meetings and included in written communications. Its purpose is simple: to remind everyone that they must follow the law and make independent business decisions.

A clear warning serves several helpful functions.

It signals intent to comply. By formally stating that the group will not discuss pricing, wages or coordinated refusals to deal, the association shows that it understands the law and takes it seriously.

It sets clear boundaries. Members are reminded that certain topics – like agreeing on labor rates or organizing a boycott – are off limits. If a conversation starts to move in that direction, it can be stopped immediately.

It protects members from inadvertent violations. Sometimes, people speak casually without realizing how their words could be interpreted. A warning creates awareness and helps prevent mistakes before they happen.

In short, an antitrust warning is not a sign of guilt. It is a sign of professionalism.

What Antitrust Warnings Do Not Do

It is just as important to understand what these warnings do not do.

They do not silence advocacy. Shops can still talk about industry challenges, insurer practices or customer concerns. They simply cannot agree to act together in ways that limit competition.

They do not prohibit discussing industry problems. Members can share experiences about claim denials, steering or reimbursement trends. They just cannot turn those discussions into agreements about collective pricing or coordinated refusals to participate in programs.

They do not prevent education about consumer rights. Associations can inform the public about the right to choose a repairer, the importance of OEM procedures and the risks of improper repairs.

And they certainly do not protect insurers from criticism. Speaking about unfair practices is lawful. Coordinating competitive behavior is not.

When used properly, antitrust warnings allow associations to remain strong, informed and vocal – while staying safely within the law.

Conclusion to Part One

When antitrust warnings are used the right way, they help associations stay strong and confident. Shops can meet, talk and learn from each other – while still following the law.

So, let’s pause and look at the bigger picture.

When we take away the myths and focus on what antitrust law really requires – an actual agreement between competitors, working together in a coordinated way and proof that someone was truly harmed – it becomes clear that most independent collision repair shops are not breaking the law.

A shop that sets its own labor rate based on its own costs is acting legally.

A shop that decides on its own not to join a DRP is acting legally.

A shop that follows OEM repair procedures because safety matters is acting legally.

An association that reads an antitrust warning before meetings is acting responsibly.

That is not cartel behavior. That is independent business behavior.

Following the rules does not silence the industry. It protects it. It gives shops the freedom to speak up, educate customers and stand firm – without fear.

But now we reach the turning point.

If shops are making their own decisions…

If they are not agreeing on prices…

If they are not organizing boycotts…

Then, here is the question that truly matters:

If customers are paying more out of pocket, and payment standards are tightening across many insurers at the same time – where is that pressure really coming from?

That is the question we must face next.

Want more? Check out the April 2026 issue of New England Automotive Report!