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Tractable accuses CCC of violating anti-trust laws in countersuit

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Insurance | Legal
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Tractable, an AI photo estimating company, accused CCC of violating anti-trust laws in a motion for countersuit filed Monday in a court case that has stretched more than five years. 

The motion for leave to file an amended answer and counterclaim filed in the United States District Court for the Northern District of Illinois Eastern Division alleges CCC controls about 85% of the estimatics market. 

“By coercing customers and suppliers into long-term exclusive contracts and blocking or punishing customers for working with technologies other than theirs, CCC has willfully stifled innovation in the market for auto insurance body shop software,” the counterclaim says. “This multi-faceted anti-competitive scheme has led to CCC’s monopoly and CCC’s ability to charge customers prices that are sometimes multiple times more expensive than competing products because customers are unable to turn to alternative products. CCC and their shareholders have enriched themselves at the expense of everyday Americans who spend billions a year on auto insurance as a life necessity.” 

CCC initially filed an intellectual property lawsuit against Tractable in October 2018. According to a complaint someone posing as “Jason Chen” with “JA Appraisal,” working on behalf of Tractable, bought a CCC One independent appraiser license in August 2017 and passed some of CCC’s trade secrets on to its London-based rival.

Two of the counts against Tractable were dismissed early in 2023. 

The Monday filing is the first time Tractable has moved from defense mode to make counterclaims against CCC. 

“Today, Tractable took legal action against CCC, challenging what Tractable believes is anticompetitive conduct that harms the auto collision ecosystem,” said Alex Dalyac, the founder and CEO of Tractable, in a press release. “Tractable took this legal action to enable choice and best-of-breed technologies in the ecosystem: for insurers, repairers, service providers, and everyday Americans, who pay for auto insurance as a life necessity.” 

Tractable says its company has been successful abroad but it and other companies hit an “anti-competitive wall” in the U.S. It claims CCC has an exclusive agreement with Hearst for a database of parts labor that are critical for estimatics products. 

“CCC regularly charges multiple times more than its competitors, yet competitors are unable to compete with CCC on the merits,” the suit says. “This translates into increased costs for the users of auto claim software tools due to the lack of choice, as well as reduced innovation in the industry (despite companies, like Tractable, that are ready and willing to provide it), and higher premiums for American consumers.” 

The filing says CCC originally sold its products as “open” with the ability to interoperate with other manufacturers’ products. It says CCC later changed its stance and “closed” its products making it so competitors’ products couldn’t interact with CCC products or create files that could be ingested into CCC’s products. 

“Not only does CCC impose barriers to importing data from competing software products CCC makes it difficult for customers to switch away from its products by claiming ownership of data that its customers enter into its platform, including information and photos that are used to generate claims estimates,” the filing says. “The prospect of losing access to this data impedes CCC’s customers from working with other estimatics platforms. Additionally, these barriers make it so that customers are unable to use their own data, which they generated, in coordination with third parties, such as Tractable.” 

Two other estimatics products are steadily losing market share to CCC, the suit says. 

The suit says CCC’s former vice president for product development claims the company works with 23 of the top 25 insurance carriers in an interview transcript for the lawsuit. 

It says auto repair shops wanting to participate in Direct Repair Programs are often required to use CCC products. 

“As CCC’s former executive put it, CCC requires its insurance company to issue a ‘thou shalt use CCC’ mandate to its repair facilities to further entrench CCC’s monopolistic hold in the market,” the filing said. 

Tractable says in its recent filing that it suspected CCC of unlawful, anticompetitive behavior but previously didn’t have a factual basis as CCC produced “almost no documents” in answers during the suit. 

“Once CCC started producing documents, however, the true scope of CCC’s anticompetitive behavior began to come to light,” the suit says. “CCC did not produce these documents willingly. Tractable was forced to compel CCC to produce documents from its executives revealing CCC’s anticompetitive conduct.” 

When asked for comment, CCC declined saying it doesn’t comment on pending litigation.


Photo courtesy of William Potter/iStock

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