FTC blocks CCC Information and Mitchell International merger

John Hayes was retained as an expert by the Federal Trade Commission and testified in its successful lawsuit to halt the merger between two insurance loss vendors. The FTC said the $1.4 billion merger of CCC Information Services and Mitchell International Inc. would hinder competition in the market for software systems used to estimate the cost of collision repairs (known as estimatics) and the market for software systems used to value passenger vehicles that have been declared a total loss. The FTC claimed the merger would harm insurers, repair shops, and car owners as the combined firm would have a market share of more than half the sales of estimatics and total loss valuation (TLV) systems, making it likely the transaction would have adverse competitive effects. CRA’s experts undertook economic analyses to determine the product and geographic markets affected by the merger, supplier shares within those markets, and the anticipated impact of the merger on prices paid by insurers and auto body shops. CRA’s analyses addressed the potential for both coordinated and unilateral effects from the merger. On March 9, 2009, the US District Court granted the FTC’s request for a preliminary injunction enjoining CCC’s merger with Mitchell. Hayes’ testimony was cited in support of the court’s decision.

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