Who Really Faces Antitrust Risk in Collision Repair?: Part 2 If Not the Shops, Then Who Might Be the Problem?

by Sean Preston, Managing Attorney of Coverall Law

In Part One (see grecopublishing.com/near0426legalperspective), we examined a hard but necessary truth: most independent collision repair shops and their associations are far less exposed to antitrust liability than many have been led to believe. When shops set their own rates, make their own DRP decisions and avoid agreements with competitors, they remain within the safe harbor of independent action.

But the conversation does not end there.

Because something is happening in the marketplace.

Payment standards appear to be tightening across multiple carriers. OEM procedures that were once routinely approved are being denied as “not customary.” Customers are seeing higher out-of-pocket bills. Adjusters are pointing to recovery targets and internal directives rather than vehicle-specific needs.

If repairers are acting independently…

If they are not coordinating rates or organizing boycotts…

Then the focus shifts.

The next logical question is not whether shops are colluding. It is whether broader insurer practices – particularly those tied to subrogation recovery performance – are influencing payment behavior in ways that reduce true market competition.

Part Two examines whether subrogation-driven recovery pressures and emerging patterns of insurer alignment may be creating a different kind of antitrust risk – one that deserves careful and objective scrutiny.

It is time to turn the lens.

Turning the Lens: Where Antitrust Risk May Actually Be Growing

For years, most of the antitrust fear in the collision repair industry has been directed at shops. But recent trends suggest it may be time to look more closely at insurer behavior.

If repairers are largely operating independently, the next question becomes: where is market pressure truly coming from? And could certain insurer practices create antitrust concerns of their own?

This is not about making accusations. It is about asking careful legal questions based on observable patterns.

Is Subrogation a Market-Shaping Mechanism?

Subrogation is a normal part of the insurance process. When one insurer pays a claim but another party is at fault, the paying insurer tries to recover money from the at-fault carrier. The percentage of money successfully recovered is often tracked as a performance metric.

These subrogation recovery metrics matter. Insurers commonly set target recovery rates. Managers may evaluate claims departments based on how well those targets are met. In some cases, adjuster performance reviews and bonuses may be tied to those numbers.

On its own, tracking recovery is not illegal. It is a business practice.

But problems can arise when recovery targets begin shaping claim payment decisions in a broad and uniform way. For example, if adjusters are told not to approve certain labor operations because “other carriers won’t reimburse them,” the focus shifts. The decision is no longer based only on what the vehicle needs; it is influenced by what another insurer might later pay.

Over time, this can create uniform denial patterns. OEM procedures that were once approved may suddenly be labeled “not customary” across multiple carriers. Labor operations may be denied not because they are unnecessary, but because paying them could reduce recovery success.

When recovery performance drives payment standards in this way, subrogation begins to function as more than a reimbursement tool. It becomes a market-shaping mechanism.

That shift is where antitrust questions can begin.

Indicators of Potential Insurer Coordination

Antitrust law looks for signs of coordinated behavior among competitors. In the insurer context, certain patterns may raise concerns.

One indicator is when adjusters cite management directives instead of claim-specific facts. If the explanation for a denial is “my manager told me not to pay this anymore,” rather than an analysis of the repair itself, it suggests centralized policy control. Centralization alone is not illegal – but uniformity across carriers can be significant.

Another indicator is when OEM procedures are denied as “not customary” across multiple insurers at the same time. If different carriers independently evaluate claims, some variation would normally be expected. When variation disappears, regulators may ask why.

Payment decisions driven by what “other carriers pay” can also raise red flags. Antitrust law is concerned when competitors look to each other to set standards. If reimbursement policies are shaped by shared expectations rather than independent evaluation, the risk increases.

Finally, shared recovery expectations may suppress normal market variation. In a competitive market, different buyers pay different rates based on their own strategies and priorities. If subrogation metrics encourage insurers to align their payment behavior closely, that alignment can reduce competition in the market for repair services.

None of these factors automatically prove wrongdoing. But together, they suggest that the real antitrust conversation may not center on independent repair shops after all.

As the industry moves forward, the focus should remain where the law places it: on whether competitors are acting independently – or in ways that begin to look coordinated.

Buyer-Side Antitrust Concerns in Collision Repair

When most people think about antitrust law, they picture sellers working together to raise prices. That is called a seller cartel. But antitrust law also applies to buyers.

When buyers work together to push prices down, that can raise serious legal concerns. This is sometimes called a buyer cartel. A related concept is monopsony power, which happens when a small number of buyers control so much of the market that sellers have very few realistic options.

In collision repair, insurers are not selling repair services. They are buying them. When a vehicle owner files a claim, the insurer effectively becomes the party paying for repairs. In that role, insurers act as major purchasers of collision repair services.

If insurers act independently, the market should show variation. Some carriers may pay more for certain procedures. Others may take a stricter approach. That variation is what competition looks like on the buyer side.

But if insurers begin to align their payment practices too closely, the situation changes.

One area of concern involves shared data through subrogation. Subrogation is meant to recover payments from at-fault carriers. But if that process leads to the sharing of detailed repair cost information, labor allowances or reimbursement standards, it can influence how carriers decide what to pay in the first place. When competitors use shared data to shape uniform payment rules, antitrust questions can arise.

Uniform labor benchmarks are another potential risk. If carriers consistently refer to what “the market pays” or what “other insurers allow” as the reason for denying certain charges, the issue becomes whether those standards are truly independent. In a competitive market, benchmarks should develop organically through separate decision-making – not through shared expectations or coordinated behavior.

Coordinated steering can also raise concerns. Steering, on its own, is not automatically illegal. Insurers may recommend certain shops; however, if multiple carriers systematically steer customers away from higher-quality shops because those shops insist on full OEM procedures or higher labor rates, the pattern may reduce competition. If steering becomes a tool to enforce uniform payment suppression, regulators may take interest.

The central question remains the same as in every antitrust case: Are competitors acting independently, or are they aligning their behavior in ways that restrain competition?

In a market where a small number of insurers control a large share of repair payments, buyer-side coordination can have just as much impact as seller-side collusion. And in collision repair, that reality deserves careful and thoughtful examination.

Why McCarran-Ferguson Is Not a Free Pass

Whenever antitrust concerns are raised about insurers, one law is almost always mentioned: the McCarran-Ferguson Act.

This federal law gives insurance companies a limited exemption from certain antitrust rules. It was passed to allow states to regulate the “business of insurance” without constant federal interference. In simple terms, it recognizes that insurance is a unique industry and gives it some room to operate under state oversight.

But the key word is limited.

The exemption does not mean insurers are free from all antitrust laws. It only applies to conduct that truly qualifies as the “business of insurance” and is regulated by state law.

There are important limits.

First, the exemption does not protect boycotts. If insurers coordinate to refuse to deal with certain businesses or use pressure tactics that function like a boycott, that conduct can fall outside the protection of the statute.

Second, the exemption does not cover activities that are not truly insurance-related. Traditional insurance functions involve underwriting risk, setting policy terms and managing claims within the scope of coverage. Activities that look more like market control or price suppression in the purchase of repair services may not fit neatly within that definition.

Third, the exemption does not immunize coordinated market suppression. If competing insurers align their reimbursement policies in a way that restrains competition among repair shops, regulators may question whether that conduct is really about underwriting insurance – or about controlling input costs in the repair market.

This is where repair-related payment practices become important.

When payment decisions are driven by shared benchmarks, subrogation recovery pressures or uniform “customary” standards across carriers, the conduct begins to look less like traditional insurance regulation and more like coordinated purchasing behavior.

If insurers are acting as collective buyers of repair services and their coordination suppresses market variation, that may fall outside the safe harbor McCarran-Ferguson was designed to protect.

The law does not automatically shield every insurer decision. The protection applies only when the activity truly fits within the regulated business of insurance and does not involve boycott or improper coordination.

Understanding these limits is important. The existence of an exemption does not end the legal analysis. It simply begins there.

Practical Guidance for Shops and Associations

Understanding the law is important. But knowing how to act day to day is what truly protects shops and associations. The goal is not to stay silent. The goal is to stay independent and disciplined.

When advocacy is done correctly, it is both lawful and powerful.

How to Advocate Without Risk

The first rule is simple: make independent decisions and be able to explain why.

Shops should document how they set their labor rates. That does not mean creating complicated reports. It simply means keeping clear records showing that rates are based on real business factors – such as technician training, equipment costs, facility overhead, certifications and local operating expenses. If questioned, the shop can show that its pricing was determined internally, not through coordination with competitors.

Second, avoid discussions with competitors about specific rates, minimum charges, DRP strategies or negotiation tactics. Even casual conversations can create misunderstandings. If a discussion begins to move toward “what are you charging?” or “are we all going to refuse this program?” it should stop immediately.

Third, keep communications focused on safety, quality and consumer rights. Shops are on strong legal ground when they explain why OEM repair procedures matter, why proper calibrations are necessary and why customers have the right to choose their repair facility. These topics center on vehicle safety and consumer protection – not coordinated pricing.

Advocacy built around safety and transparency is far less risky than advocacy centered on collective pricing pressure.

Above all, each shop must decide for itself how to operate. Independence is not just good business practice – it is the legal safeguard.

How Associations Should Operate

Associations carry additional responsibility because they bring competitors together.

First, maintain and regularly read a clear antitrust compliance warning at the start of meetings. This reminds members of the rules and sets the tone for lawful discussion. Including the statement in agendas, newsletters and official communications reinforces that commitment.

Second, use structured agendas and keep accurate minutes. Meetings should follow planned topics. If discussions drift into sensitive areas, leadership should guide them back. Written records should reflect lawful, appropriate discussions – not vague statements that could be misread later.

Third, redirect improper discussions in real time. If someone begins talking about setting minimum rates or organizing a collective refusal to deal, leadership should immediately stop the conversation and restate the compliance policy. Silence can be misinterpreted as agreement. Clear correction shows good faith.

Finally, train Board members and leaders on basic antitrust principles. Leadership sets the example. When officers understand the difference between advocacy and coordination, the entire group benefits.

When shops and associations operate with structure, clarity and independence, they can speak confidently about industry challenges without fear. Compliance does not weaken their voice – it strengthens it.

Conclusion: Antitrust Law Is Not the Enemy of Repairers

Antitrust law was created to protect competition and consumers. It was not designed to protect insurer profit margins. Its purpose is to make sure markets stay fair, open and competitive. When understood correctly, these laws do not stand in the way of honest businesses trying to do the right thing.

For collision repair shops and associations, compliance is not a weakness. It is a strength. When a shop can clearly show that it sets its own rates, makes its own DRP decisions and follows OEM procedures based on safety – not coordination – it builds credibility. When an association uses antitrust warnings, structured agendas and disciplined leadership, it shows professionalism and responsibility.

Independent action is both lawful and powerful. A shop does not need an agreement with competitors to stand firm. It can refuse unsafe shortcuts. It can decline underpaid work. It can educate customers about their rights. And it can advocate for fair treatment – all on its own.

The real danger is not speaking up. The real danger is misunderstanding the law and staying silent out of fear. When shops self-censor because they are worried about being accused of collusion, consumers lose information, and the industry loses its voice.

Understanding antitrust law does not weaken collision repairers – it clarifies where they can safely stand their ground.

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