Allegations of Auto Insurer Monopsony Power

The Situation

A leading provider of private passenger automobile insurance was accused by an auto repair shop of illegally steering customers to other shops and suppressing labor rates.

NERA's Role

NERA experts provided a detailed analysis of the opposing expert’s steering model and demonstrated that it could not accurately measure allegations of illegal steering. NERA also demonstrated that the opposing expert’s but-for labor rate, e.g., the labor rate that would have prevailed but for the alleged behavior, was based in transactions that were not comparable with auto body repair and that the damage estimate was inflated by the opposing expert’s failure to consider economic effects in the but-for world, like the effect of price on quantity.

The Result

The case is currently pending.