INDIANA, Pa. — Specialty Tires of America Inc. and its Race Tires America division have filed a federal antitrust lawsuit against Hoosier Racing Tire Corp., claiming Hoosier is using its monopoly power in the dirt oval track market to eliminate competition for the sale of racing tires.
Specialty Tires said Hoosier is entering into exclusive, long-term agreements with major sanctioning companies so that they will specify only Hoosier tires at races they sanction in return for "large payments."
"Hoosier´s actions are severely affecting sales of American Racer tires," said Specialty Tires CEO Don Mateer. "Specialty must resort to the courts or we will suffer the same fate as numerous other competitors that have been excluded from this market, allowing Hoosier´s market share to grow dramatically."
A Hoosier Tire spokesman said the firm hadn´t seen the suit, and declined to comment.
The suit, filed Sept. 25 in the Federal District Court for the Western District of Pennsylvania, cites sections of the Clayton Act and Sherman Act for justification. The suit seeks treble damages for "injuries sustained by plaintiff" and a permanent injunction preventing Hoosier-only tire rules for dirt racing events in relevant markets.
The suit is not against individual promoters or track owners, Specialty Tires said. Instead, the tire maker said the legal action challenges "the authority of a monopolist to use exclusive agreements to eliminate competition and seeks a level playing field for creating spec tire or track rules."
Specialty Tires claims Hoosier controls more than 70 percent of the dirt oval track market, which consists of about 636 tracks in the U.S. holding races roughly 22 weeks a year.
"Long-term, exclusive contracts between Hoosier Racing Corp., the dominant race tire supplier, and large sanctioning companies, such as Dirt Motor Sports Inc.´s World Racing Group, IMCA and WISSOTA, combined with large payments by Hoosier to the sanctioning groups, promoters and track owners have effectively foreclosed market competition for Race Tires America and other tire companies," said Dave Mateer, general manager of Race Tires America, in a prepared Specialty Tires statement.
"This has led to fewer choices and higher prices for dirt racers. Because of these anti-competitive agreements, we´re not allowed to battle for sales, even though racers like our tires and the quality is very competitive," he said.
The suit follows by a few weeks the issuance of Race Tires America´s "Declaration in Favor of Competition," a position statement on the benefits of racer parity and economical tire costs for racers. In that document, Specialty Tires said it believes parity and economy can be can be achieved through opening competition among tire suppliers offering a limited selection of tire sizes and compounds based on enforceable, objective tire criteria.