Alaska and 16 States Enter Into Settlement With Michelin North America, Inc.
May 14, 2009
(Anchorage, AK) - Acting Attorney General Rick Svobodny today announced a multi-state settlement with Michelin North America, Inc. ("Michelin") of Greenville, South Carolina, regarding alleged representations Michelin made in its advertising of Michelin fuel efficient tires. The multi-state investigation was led by the Tennessee Attorney General's Office and involved the states of Alaska, Arizona, Delaware, Iowa, Kentucky, Massachusetts, Montana, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, Texas and Vermont.
The attorneys general allege that in May or June of 2008, Michelin advertisements began promoting savings associated with its fuel-efficient tires. Some were full page ads that were run in the Wall Street Journal and USA Today newspapers, as well as radio and television advertisements on ESPN during athletic events such as SEC football. The ads contained representations such as "It's time to fight back. 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 states allege that Michelin's fuel efficiency advertisements did not adequately disclose that the advertised costs savings were based solely on savings in fuel costs. There are factors other than fuel efficiency that might affect the savings a consumer could achieve by choosing one tire over another, such as initial cost of the tire, average life of the tire in terms of mileage. Further, the states review of Michelin's own studies indicates that its tires are only the most fuel efficient in 78 percent of its classes of tires. However, in some classes of tires, a Michelin tire is not the most fuel-efficient. The states also expressed concern that footnote disclosures used by Michelin in the fuel efficiency advertisements were not clear and conspicuous.
The states acknowledge that Michelin fully cooperated with the multi-state investigation and the investigation did not question the safety or quality of Michelin's tires. Michelin denies any wrongdoing.
Under the terms of the settlement, Michelin has agreed to possess competent and reliable scientific evidence substantiating any fuel efficiency claim regarding its tires and to make other business practice improvements. Additionally, Michelin is paying the states $375,000.00.
"I'm pleased to announce today's settlement with Michelin," Svobodny said. "My office will continue its efforts to ensure consumers can rely on claims made by companies when promoting their products. Additionally, I want to take this opportunity, with the upcoming summer vacation season approaching, to urge all Alaskans and visitors to Alaska to check their tire pressure regularly and to make sure to load the vehicle according to the directions of the manufacturer, to avoid serious catastrophic tire failures that can result when the tire pressure is too low, or when the vehicle is loaded with too much weight."
Consumers wanting to file a complaint relating to a consumer transaction may do so by obtaining a complaint form from the Office of the Attorney General, Consumer Protection Unit at www.law.alaska.gov/consumer or by calling 269-5200 or 1 (888) 576-2529 (toll free from outside Anchorage).
Contact: Julia Coster, Assistant Attorney General, (907) 269-5200.
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