Arrangements among insurance companies to effectuate the price or any part thereof of competitive bids submitted by automotive repair shops is an unlawful restraint of trade in violation of Sections 416.020 and 416.040, RSMo 1969. However, any arrangement between insurance company and automotive repair shop whereby the former requires the latter to afford it discounts on specified work is not violative of Sections 416.020, 416.030, or 416.040, RSMo 1969, absent an arrangement among insurance companies to effectuate such a practice. Also, any arrangement among insurance companies to limit competitive bidding on automotive repair to only those automotive repair shops which agree to pre-conditioned limits on their competitive bid is violative of Sections 416.030 and 416.040, RSMo 1969, as an unlawful restraint of trade.

ANTI-TRUST: Arrangements amon~ insurance com- panies to effectuate the.price or any part thereof of competitive bids submitted by automotive re- pair shops 1s an unlawful restraint of trade in violation of Sec- tions ~16 . 0 2 0 and ~16 . 0~0 , RSMo 1969. However, any arrangement between an insurance comnany and an automotive repair shop whereby the former requires the latter t o-afford it discounts on specified work is not violative of Sections 41 6 .020, ~1 6 .0 30. or ~16.0~0, RSMo 1969 , absent an arrangement among insurance companies to effectuate such a practice. Also, any arran~ement amon~ insurance companies to limit competitive biddin~ on automot ive repair to only those automotive repair shops wh1ch agree to pre- conditioned limits on their competitive bid is violative of Sections ~16 . 0 30 and ~1 6.040 , RSMo 1969, as an unlawful restraint of trade. Honorable Donald E. Lamb Prosecuting Attorney Reynolds County P. 0 . Box 52 January 5, 1972 Centerville, Missouri 63633 Dear Mr. Lamb: OPI NION NO. 7 FILE D g This is in response to your request for an opinion on whether specified practices among insurance companies and between insurance companies and automotive repair dealers relating to the repair by the latter of the formers' insured automobiles constitutes practices inimical to the anti- trust laws of this state . The facts as set forth in your opinion request are as follows: "Several automobile repairmen in this county have complained to me concerning the practices followed by some insurance companies in the area. These companies have entered into an agreement or understandin ~ with one of the automobile dealers in the area, whereby this dealer gives the insurance companies an across- the- board discount of 30% on all windshields replaced and a 10% discount on all parts . The other dealers have been informed by the insur- ance companies that, unless they give the in- sur ance companies an identical discount, that these dealers will not even be invited to make competitive bids on repairs. A number of the Honorable Donald E. Lamb dealers have refused to do this , with the re- sult that they have not been invited to make comoetitive bids on the various repair jobs for the insurance comnanies. In addition, the insurance com~anies have been reouiring their insureds to go only to the one renair shop which has a~reed to ~ive the insurance cnm- oanies the aforement ioned discount . "'rhe comnlaint of the remaining repair shoos is, not that they are renuired by the ins ur- ance companies to submit the low bids in order to obtain a given job, but that they are not even given the opportunity to make a competi- tive bid in the absence of an overall a~ree ­ ment with the insurance companies to give the insurance companies the flat discount rate noted above. 11 Specifically, by your letter, you have inquired: " . . . whether such an agreement or arrange- ment by and between the insurance companies and any particioating reoair shop would be in violation of the provisions of the ant i -t rust laws of the State of Missouri, snecifically Sections 416.020, 416.0)0 or 416.040, RSMo. 11 In the followin~ oninion, this office accepts the facts as stated in your request, This office, itself, has no specific in- formation as to the existence of those facts . It is the opinion of this office that any 11 ap:reement, combina- tion, confederation or understandin~ 11 among insurance companies to fix, stabilize or i n any manner effectuate the price, 1 .e . , competi- tive bid, or any part thereof, at which an insurance company. a mem- ber to such .understandinp.:, will allow its insureds' automobiles to be repaired by an automotive shop is a restraint of trade in viola- tion of Section 416.020, RSMo 1969. The latter statutory section provides that any !' ••• agreement, combination, confederation or understanding . •. to regulate, control or fix the price of •.. repair, .. . [is a] conspiracy in restraint of trade, •.. " The specific mention of repairs in Section 416 . 020 necessitates the conclusion by this office that the service exemntion (see State ex rel. Star Pub. Co. v. Associated Press, 60 S.W. 91 (Mo. bane l900J and State v. Green,--130 s:W:2Cf - ~(Mo. 1939)) from the Mis- souri anti=trus~faws is not annlicable to the factual situation presented in your opinion reauest. An ag reement amon~ competitors -2- Honorable Donald E. Lamb to "reP:ulate, control or f1 x'' orices is termed a hor:l zontal arrange- ment and has, since the incention of this state's restraint of trade laws, been held violat1ve of said laws. State ex rel . Crow v. Fire- man's Fund Ins. Co., 52 S.hl. 595 (Mo. bane 1899). Such horizontal combinations ·are ille~al per se. State ex rel. Barrett v. Boeckeler Lumber Co., 256 S.W. 175 (Mo.~anc 1923) ; State ex rel. Kimbrell v. People's Ice, Stora~e & Fuel Co., 151 S.W. 101--nMo. 1912); Reisen- bichler v.- Mar<]uette· Cement Co., 108 S.W.2d 343 (Mo. 1937) . The United States Sunreme Court - in its interoretation of Section 1 (fede- ral counteroart ~o Sections 416.010 and ~16.020, RSMo 1969) of the Sherman Act (15 U. S .C. §7) has consistently held t hat price fixing is a ~ se offense. That is to say, its le~ality does not depend on a showin~ of unreasonableness, since price fixing is conclusively presumed to be unreasonable. United States v. McKesson & Robbins, Inc., 351 IJ.S. 305 (1956) and United States v . Container Corpora- !}on o_f:_3IO_er~c~.' 393 U.S. 3 33 ff91 9). However, any business arran~ement between an insurance company and an automot1.ve repair shon whereby the latteragrees to afford the former specified discounts on designated work is not an unlaw- ful agreement in restraint of trade under the factual situation depicted in your request. Such an arrangement is the prerogative of independent businessmen and does not violate Sections 416.020 , 416 . 030 or 416.040, RSMo 1969. It is the further opinion of this office that an "agreement, combination, confederation or understandin~ 11 among insurance com- pan:les to limit comoetitjve biddin~ on automotive renair to only those automotive repair shoos which a~ree to pre-conditioned limits on their competitive bids, i .e., the soecific discounts as mentioned in your opinion re<Juest, is violative of Section 416.030, RSMo 1969. The latter section provides that any: " .•. two or more persons enp.;a?"ed in buying .•. repair, •.. who ... enter into, ... any •.. a~reement, combination, confedera- tion, association or understanding to control or limit the trade . or to limit competi- tion in such trade • . . for the reason that such other person is not a member of or party to such ... combination, confederation, as- sociation or understanding, or shall boycott or threaten any person from buyin~ or selling to any other person who is not a member of ... [is] guilt.v of a consoirac;v in restraint of trade, ... " Therefore, any arran~ement amon~ insurance companies by which they refuse to accent comnetitjve bids from automotive repair shops on -3- Honorable Donald E. Lamb the former ' s insured automobiles, absent an agreement by the auto- motive repair shop to adhere to the insurance comnany's price-related concessions, is an ille~al boycott of trade and violative of Sec- tion 416 . 030, RSMo 1969 . See Walsh v. Association of Master Plumbers, 71 S . W. 4?S (St . L.Ct.App . 1902r;-sta~e ex rel. Barrett, sypra; and Dietrich v. Cape Brewery & lee Co. , 28"'6 S. \.J. 38 (Mo . 192"5 . Under Missouri's counternartin-the federal statute (Sherman Act, §l) groun boycotts are illegal per se . See Klor ' s Inc. v. Broadway-Hale Stores , 3?9 U.S . 207 (1959)-. --- Section q16.0~0 , RSMo 1969, provides a further remedy of de- claring: " . .. arran~ements, contracts, a~reements, combinations or understandin~s . . . [which] lessen, or which tend to lessen, ... trade , . . . or .. . which ... increase, . .. or .. . tend to increase, the market price . . . to be . . . void; • . . a Section 416.040 , RSMo 1969 , does provide the substantive test of lessening com~etition or increasin~ price and under such a stand- ard would make this statutory proviso likewise applicable to those arran~ements which the foregoing oninion has determined to be ini- mical to the anti- trust statutes of this state . CONCLUSION It is the opinion of this office that arrangements among in- sur a nce companies to effectuate the price or any part thereof of competitive bids submitted by automotive repair shops is an unlaw- ful restrai nt of trade in v1olation of Sections 416.020 and 41 6 . 040, RSMo 1969. However, any arran~ement between an insurance com- nany and an automotive repair shon whereby the former requires the latter to·-arrord it djscounts on snecified work is not violative of Sections 416 . 020, q16 . 030 or 416.040, R~~o 1969, absent an ar- ran~ement amon~ insurance comnanies t o effectuate such a practice . Also, any arranRement among insurance comnanies to limit comneti- t1ve bidding on automotive repair to only those automotive repair shops which agree to pre- conditioned limits on their competitive bid is violative of Sections 416 . 010 and 416.040, RSMo 1969, as an unlawful restraint of trade. The foregoin~ opinion , which I hereby anprove, was prepared by my Assistant, Kermit W. Almstedt . ~ery~ JOHN C. ;ANPORT~ _,.zt? Attorney General - 4-