Michelin settles with 17 AGs over decptive tire advertising

Chris Rizo May 14, 2009, 2:31pm

Bob Cooper (D-Tenn.)

Richard Cordray (D-Ohio)

NASHVILLE, Tenn. (Legal Newsline)- Michelin North America Inc. has reached a multistate settlement with 17 state attorneys general to resolve claims that the company falsely advertised its fuel-efficient tires, officials said Thursday.

Under the settlement, the Greenville, S.C.-based company has agreed to pay a total of $375,000 to the participating states as well as substantiate its fuel efficiency claims in ads.

"We think it is important that consumers have all the information they need to make purchasing decisions and are pleased that we were able to resolve this matter," said Tennessee Attorney General Bob Cooper, who led the investigation. "We appreciate the timely and complete cooperation of Michelin in this matter."

The attorneys general alleged that Michelin ran a national ad campaign beginning in May or June of last year that claimed consumers could save money by using Michelin's fuel-efficient tires.

In its ads, the company said such things as: "Michelin fuel-efficient, long-lasting tires help you save money," and "Michelin makes the most fuel-efficient line of tires on the road, which saves you money over the life of your tires."

The AGs said the company's claims were based solely on fuel costs and did not include other factors that might affect savings, such as initial cost of the tire or average life of the tire.

As a part of their investigation, the attorneys general said they found that Michelin tires were the most fuel-efficient tires only in 78 percent of its classes of tires.

"Consumers must be able to rely on the claims that companies make in their advertisements," Ohio Attorney General Richard Cordray, a Democrat, said in a statement. "Today's settlement with Michelin will help ensure that this happens."

In addition to Tennessee and Ohio, also a part of the settlement are: Alaska, Arizona, Delaware, Iowa, Kentucky, Massachusetts, Montana, Nevada, New Hampshire, New Mexico, North Carolina, Pennsylvania, Rhode Island, Texas and Vermont.

For its part, Michelin said in a statement that it has presented test data demonstrating a "major advantage" in rolling resistance and related fuel-efficiency compared to most tires in its competitive set.

The company said in 29 of 37 tire categories the average rolling resistance of the Michelin tires was lower than the average of all other competitive tires. In addition, the data showed that a Michelin brand tire was the most fuel efficient in the majority of tire categories.

"We fully cooperated with the AG's investigation into this matter because we support the highest level of precision in consumer communications," said Scott Clark, COO of Michelin Americas Small Tires.

"We believe that the messaging in the advertisement, as well as the substantiation behind the product claims, is accurate and factual. We will continue to promote the fuel-efficiency advantages of Michelin tires in future advertising," Clark added.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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