Major Tiremakers Face Antitrust Lawsuit Over Alleged Price-Fixing

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A proposed class action lawsuit alleges the largest tiremakers in the world have illegally conspired to fix the prices of new replacement tires for passenger cars, vans, trucks and buses sold in the United States. 

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The 33-page antitrust lawsuit against Continental, Michelin, Nokian, Goodyear, Pirelli and Bridgestone alleges the companies have, since at least January 2020, “contracted, combined and/or conspired to fix, raise, maintain, or stabilize” tire prices nationwide, including by, among other methods, “signaling” price increases via public statements, implementing “coordinated lock-step price increases,” and utilizing revenue management software to share pricing information. 

The complaint was filed in Manhattan federal court on February 15, just over two weeks after the European Commission announced it had carried out dawn raids—i.e., unannounced inspections—of the tiremakers’ facilities amid an investigation into alleged price coordination and other suspected anticompetitive practices. 

According to the suit, the companies’ unlawful pricing coordination has caused direct tire buyers nationwide to pay “supra-competitive” prices, in violation of the federal Sherman Act. 

In particular, the filing contends that the allegation of an agreement among the defendants to fix prices is supported by, among other factors, “sudden and dramatic parallel price increases,” some of which “ran contrary to [the companies’] economic interests”; the dawn raids carried out by the European Commission; the “high level of market concentration” and significant barriers to entry within the overall tire market; and the “myriad of opportunities” that the companies’ employees allegedly had to fix tire prices. 

As the suit tells it, the highly concentrated nature of the tire market in the U.S. has made it more susceptible to “cartelization,” whereby a small group of competitors can “solve the coordination and trust problems” that historically prevent a cartel from forming or otherwise destabilize an existing cartel. In particular, Bridgestone, Michelin and Goodyear control roughly 65 percent of the market in the U.S., and the general market structure allows the defendants to wield massive influence over prices, the filing relays. 

Before January 2020, the price level of tires nationwide was “stable” and slowly changed by only small amounts, the suit says. Over the last four years, however, tire prices have increased dramatically, “driven by lock-step prices [sic] increases from the major U.S. tire manufacturers,” the lawsuit alleges. 

“Since at least 2020, Defendants have coordinated price increases to increase their profits. The justifications offered by the Defendants – that their price increases were due primarily to increased input costs, chiefly stemming from the pandemic and the war in Ukraine –were pretextual and do not fully account for the significant increases in prices over the Class Period.” 

ProPublica reported last March that the average price of tires had gone up more than 21 percent over a two-year period, 70 percent higher than core inflation, the case shares. 

The defendants in the tire antitrust lawsuit include Continental Aktiengesellschaft; Continental Tire the Americas, LLC; Compagnie Générale des Établissements; Michelin North America, Inc.; Nokian Tyres plc; Nokian Tyres Inc.; Nokian Tyres U.S. Operations LLC; The Goodyear Tire & Rubber Company; Pirelli & C. S.p.A.; Pirelli Tire LLC; Bridgestone Corporation; Bridgestone Americas, Inc., and several unidentified “Doe” defendants.

According to the complaint, the defendants control nearly two-thirds of the global and U.S. markets for tires. 

The lawsuit looks to cover all persons or entities who bought tires directly from any of the above-listed companies within the United States from January 1, 2020, “until the time that the adverse effects of the Defendants’ anticompetitive conduct” cease. 

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