Bandag sues Michelin over predatory tactics

MUSCATINE, Iowa (Sept. 17, 1999) — Bandag Inc. is suing two U.S.-based divisions of Michelin, claiming that the tire maker misappropriated trade secrets, spread false rumors about Bandag, and engaged in predatory pricing, among other tactics intended to drive Bandag out of business.

The suit, filed for undisclosed damages in the U.S. District Court for the Southern District of Iowa, claims that Michelin North America and Michelin Tire Retread Technologies used pressure and, in some cases, significant financial inducements, to persuade seven major dealers to convert to Michelin’s retreading system.

Bandag also alleges that Michelin misappropriated confidential information, and made false and derogatory statements about Bandag and false, unsupported claims about its own products. Furthermore, the retread specialist said Michelin uses predatory pricing tactics.

The suit also alleges that Michelin wrongfully obtained confidential, proprietary and trade secret information from Bandag, using it to create and refine the Michelin retread prototype and system.

“We believe Michelin’s goal is to control the truck retread tire market and then shift the product mix from retreads to costlier new replacement tires, ” Bandag CEO Martin G. Carver said yesterday. “This would eliminate significant competition, ultimately raise prices and decrease consumer choices.