Class action claims that leading tire manufacturers are involved in price-fixing
Tire class action lawsuit overview:
- Who: Plaintiff Michele Edwards filed a class action lawsuit against Bridgestone, Continental, Goodyear, Michelin, and other major tire manufacturers.
- Why: Tire manufacturers allegedly engaged in a price-fixing conspiracy by artificially inflating the price of replacement tires.
- Where: The tire price-fixing lawsuit was filed in New York federal court.
Some of the world’s largest tire manufacturers conspired to artificially inflate tire prices by taking advantage of conditions created by the COVID-19 pandemic, according to a recent class action lawsuit.
Plaintiff Michele Edwards filed the lawsuit against Bridgestone, Continental, Goodyear, Michelin, and other major tire manufacturers, claiming they significantly increased the prices of replacement tires in 2021 and 2022 due to market concentration, largely inelastic demand for tires, and high barriers to entry.
“By 2023, inflation had eased and supply chain logistics had recovered, but tire prices remained high, despite excess supply,” the lawsuit says. “In a normal functioning economy, as costs lowered and there was excess supply, prices would lower too, as inflated prices would lead to a loss of market share.”
However, the tire makers allegedly continued to sell the tires at inflated prices even after the costs of production decreased.
Tire price-fixing possible due to ‘oligopolistic’ market, tire class action alleges
Edwards filed the tire class action lawsuit after the European Commission announced Jan. 30 it raided tire manufacturers over concerns the companies may have violated European Union antitrust rules by engaging in price coordination.
“The U.S. tire market is oligopolistic, with three of the defendants controlling the lion’s share of the market: in 2022, defendants Bridgestone, Michelin, and Goodyear made up almost 64 percent of the entire replacement tire market,” the class action lawsuit asserts.
Edwards asserts this small concentration of market power makes it easier for the companies to conspire and engage in a tire price-fixing scheme.
The tire class action lawsuit says the defendants violated the federal Sherman Act by artificially restraining competition with regard to new replacement tires for passenger vehicles sold in the United States.
Edwards filed the lawsuit on behalf of herself and a proposed class of individuals who purchased tires from any of the defendants at supracompetitive prices.
Last year, Michelin recalled a number of its replacement tires because they failed to meet traction requirements.
What do you think about the allegations in the tire price-fixing lawsuit? Tell us your thoughts in the comments.
Edwards is represented by Michelle C. Clerkin, Jason C. Spiro, David B. Harrison, and Shomik Ghosh of Spiro Harrison & Nelson and Rachel Dapper of Dapper Law PA.
The tire price-fixing class action lawsuit is Michele Edwards v. Continental Aktiengesellschaft, et al., Case No. 1:24-cv-01092, in the U.S. District Court for the Southern District of New York.