The HVAC Price-Fixing Lawsuit: What the Antitrust Case Against the Big Seven Means for Your Acquisition

You’re about to pay 3.5x SDE for a company whose equipment costs may have been artificially inflated for six straight years. Before you wire that money, you need to understand what’s happening in federal court — and what it does to your deal math.

The Short Version

In March 2026, a federal class action called Berg v. Robert Bosch was filed against the seven manufacturers that collectively control more than 90% of the U.S. HVAC equipment market: Carrier, Trane, Daikin, Bosch, Lennox, Rheem, and AAON.

The allegation: coordinated, parallel price increases on residential and commercial HVAC equipment since 2020, producing cost spikes that far outpaced both the Consumer Price Index and the broader appliances Producer Price Index. Equipment prices have roughly doubled since 2019. Plaintiffs say that’s not a supply chain story — it’s a cartel story.

I’m not a lawyer and neither are you. But if you’re buying an HVAC business right now, this lawsuit touches your deal in at least five ways. Let’s work through them.

What the Lawsuit Actually Alleges

The complaint is built around a straightforward antitrust theory under Section 1 of the Sherman Act: the Big Seven engaged in a conspiracy — whether through direct communication, trade association coordination, or conscious parallelism — to raise prices in lockstep across the industry.

Key allegations include:

• Equipment prices rose faster and steeper than input costs, CPI, or PPI for comparable appliances would predict
• Pricing decisions across competing manufacturers were suspiciously synchronized
• The seven defendants together control over 90% of U.S. HVAC shipments, making coordination both possible and profitable
• The affected period runs from approximately 2020 through the present

The plaintiffs include residential contractors and commercial purchasers who bought covered equipment during that window. The Hagens Berman class action page is the best place to track the litigation directly.

For a deeper look at how the manufacturers define their dealer relationships — and why that matters for price signaling — see our piece on dealer authorization agreements.

How Inflated COGS Distorts the P&L You’re Buying

This is the part that keeps me up at night when I think about buyers in this market right now.

Every dollar of artificially inflated equipment cost flows directly through cost of goods sold and compresses the seller’s gross margin. The seller still got paid for the job — customers absorbed it. But the real question is: what does “normal” COGS look like, and is this business as profitable as it appears?

The Worked Example

Suppose you’re looking at an HVAC company doing $3.2 million in revenue. The broker’s spread shows:

At 3.5x SDE, the asking price is $2,240,000.

Now consider the antitrust scenario. Pre-2020, equipment COGS for a residential replacement-heavy shop like this ran closer to 28–30% of revenue. If equipment costs were artificially inflated by, say, 20% above a competitive baseline — a conservative read of the data — the “true” equipment COGS under normal pricing might have been closer to $960,000.

That $192,000 difference in annual COGS flows to SDE. Recalculated SDE: $832,000. At 3.5x, the business is now worth $2,912,000 — or the current asking price represents a multiple closer to 2.7x of what the real economics should have been.

Run it the other way: if prices return to a pre-cartel baseline post-lawsuit, the business gets a margin tailwind without doing anything. You bought thin and you’ll run fat. That’s the bull case.

The bear case is that prices don’t drop because the case gets dismissed, the “new normal” is codified, and you paid a multiple on compressed margins assuming the compression was structural, not artificial.

For a full primer on how multiples get constructed in the first place, read our HVAC acquisition math guide. The COGS analysis here layers directly on top of that framework.

The Forward-Looking Pricing Uncertainty

This is the part nobody has a clean answer to, and I’ll be straight with you: I don’t either.

Scenario A — Lawsuit succeeds. If plaintiffs prevail and the court orders structural relief (plus damages), equipment prices could normalize downward over a 12–24 month window. For a buyer who acquired at today’s COGS levels, that’s a margin expansion you didn’t pay for. It also means you may have overpaid on a revenue-multiple basis if the top line partially deflates as lower costs get passed through competitively.

Scenario B — Lawsuit fails or settles small. The current price structure gets de facto validated. Margins don’t expand. Buyers who modeled “normal” COGS are wrong, and they’ll be operating at the margins they underwrote — which are thinner than historical benchmarks suggested they should be. The new normal is the normal.

Scenario C — Prolonged uncertainty. The case drags for three to five years (antitrust class actions routinely do). You buy, you operate, prices stay roughly where they are, and the resolution happens in year four of your ownership. This is probably the most likely scenario, and it means you need to underwrite the business at current COGS and think of any settlement recovery as optionality, not a base case.

The Bureau of Labor Statistics PPI data for HVAC equipment (Series ID PCU333415333415) is worth downloading and charting yourself before you go to LOI. The divergence from the broader appliances PPI starting in 2020 is not subtle.

Customer Trust: The Reputation Management Angle

Here’s something the transaction lawyers won’t bring up at the closing table.

Homeowners have noticed. Equipment replacement jobs that cost $4,500 in 2019 are running $9,000–$11,000 in 2026 markets. Most customers assume the contractor is pocketing the difference. Some of them are right — operators with pricing power did capture margin. But many of them are wrong, and they don’t know it.

When the antitrust lawsuit gets coverage in local news and trade outlets — and it will — homeowners are going to start asking questions. “Did my contractor overcharge me? Were they part of a price-fixing scheme?” The answer is no: contractors are buyers of this equipment, not the conspirators. But that distinction won’t land cleanly in a Facebook comment.

As a new owner, you have a clean-slate opportunity here. Consider:

• Proactive communication to your customer list about what the lawsuit is, who the defendants are (the manufacturers), and how your shop operates
• Transparent pricing proposals that break out equipment cost vs. labor vs. margin — more work, but it builds trust during a suspicious environment
• Monitoring your Google and Yelp reviews for any mention of pricing concerns and responding factually

This is a reputation management window, not a crisis. New owners who get ahead of it will build loyalty. Those who ignore it will get blindsided in year two.

The Class Action Claim Your Target May Already Own

This is the section most buyers completely miss. Read it twice.

If the Berg v. Bosch litigation proceeds as a class action and purchasers of covered equipment during 2020–2026 are certified as a class, the target business you’re acquiring may be a class member. That means it may have a legal claim — potentially worth real money — against the manufacturer defendants.

In a standard asset purchase, claims like this don’t automatically transfer to the buyer. Whether the seller retains the claim or it transfers with the business depends entirely on:

1. How the asset purchase agreement (APA) defines “acquired assets”
2. Whether the class action claim is explicitly included, excluded, or simply not addressed
3. The class action notice and opt-in/opt-out mechanics that apply to the certified class

If the APA is silent on this, the seller almost certainly keeps the claim — and you’ve just bought a business that could receive a five- or six-figure settlement check in three years and you won’t see a dollar of it.

The right move: get this in front of your acquisition attorney before the APA is drafted. You want explicit language assigning any claims arising from purchases of HVAC equipment between 2020 and the closing date. The seller may push back. That’s a negotiation, not a dealbreaker — but only if you’ve identified it.

For more on how sellers manipulate what’s “in” and “out” of the financial picture, see our piece on the add-back trap. The same mindset applies here — what’s excluded from the deal is sometimes more important than what’s included.

ACCA’s contractor FAQ on the HVAC antitrust lawsuit is worth reading in full. It addresses the class membership question directly for contractors.

What to Do in Due Diligence Right Now

You don’t need to resolve the lawsuit to buy a business. You need to understand it well enough to underwrite through it. Here’s what I’d focus on:

Equipment Sourcing and Supplier Concentration

• Which brands does the company carry? Are they primary dealers for one of the Big Seven?
• What does the brand authorization agreement say? (Dealer authorization guide here)
• Do they have multi-brand capability, or are they locked into a single manufacturer’s pricing?
• What’s the purchase volume with each supplier over the last three years?

COGS Trend Analysis

• Pull monthly or quarterly equipment COGS as a percentage of revenue for 2019–2025
• If the seller’s equipment COGS percentage was stable or declined over this period, they captured margin. Know this.
• If it rose, they absorbed cost increases without fully passing them through — their margins were structurally compressed and the historical SDE understates what the business can earn
• Check whether any COGS anomaly shows up as an add-back in the seller’s recast. If it does, ask what methodology was used. (The add-back trap covers this in detail)

Customer Sentiment

• Ask for any customer survey results or NPS data from 2023–2025
• Review Google/Yelp/BBB reviews for pricing complaints
• Ask the seller directly: “Have you had any customer conversations about pricing relative to competitors or prior years?”
• If they’re dismissive, that’s a yellow flag — this is a real issue in the market

The Class Action Exposure

• Ask the seller’s attorney whether the company has received any notice of the Berg v. Bosch litigation
• Get a representation in the APA that no claims have been waived or releases signed that would compromise class membership
• Have your attorney explicitly address the assignment of any antitrust claims in the asset schedule

The Stranded Inventory Connection

One more angle worth flagging: if the target company is carrying R-410A equipment on its balance sheet, that inventory may have been purchased at inflated prices during the alleged cartel period. And the refrigerant phasedown that started January 2025 means that inventory may also be declining in resalable value.

You could be inheriting equipment that was overpriced going in and is depreciating on the way out. We covered this in detail in our piece on stranded R-410A inventory. Run those two analyses together — the antitrust inflation question and the refrigerant transition question — because they compound.

Legislative Tailwinds (and More Uncertainty)

The Big Beautiful Bill tax overhaul introduced new incentive structures for residential HVAC equipment upgrades that could affect demand-side dynamics during the same period this litigation resolves. If equipment prices normalize down while demand incentives push replacement volume up, you could be in an unusually favorable margin environment by 2027–2028.

But that’s a best-case confluence. Underwrite the base case.

FAQ

The Bottom Line

I’ve watched buyers walk away from good businesses over issues that didn’t matter and close on bad ones without noticing the issues that did. The Berg v. Bosch antitrust case is a real issue — not a dealbreaker, but not ignorable.

Here’s what you actually need to do:

1. Rebuild the P&L with normalized equipment COGS using pre-2020 gross margin benchmarks as a reference point
2. Get the class action claim addressed explicitly in the APA before you sign
3. Ask the seller about customer sentiment on pricing and look at their reviews yourself
4. Combine this analysis with your R-410A inventory review — the two risks compound
5. Model both scenarios (prices normalize, prices don’t) and make sure the deal works in the bear case

The business you’re buying may be worth more than the asking price if this case resolves favorably. It may be worth roughly what you’re paying if it doesn’t. What it almost certainly is not — if you’ve done this analysis — is a deal that blows up because of the lawsuit.

Know what you’re buying. Then decide.

Data sources: ACHR News HVAC Antitrust Coverage | Hagens Berman Berg v. Bosch Case Page | ACCA Contractor FAQ on HVAC Antitrust Lawsuit | BLS PPI HVAC Equipment Series | AHRI Equipment Shipment Data