Enthusiasts of the popular “Madden NFL” video game, put out by industry leader Electronic Arts, have scored a legal victory, as the parties have reached a settlement in the class action lawsuit alleging that Electronic Arts violated antitrust and consumer-protection statutes. See Pecover v. Electronic Arts Inc., No. 08-2820 (N.D. Cal. filed June 5, 2008).
The plaintiffs had alleged that Electronic Arts foreclosed competition in a market for interactive football software by acquiring, in separate agreements, exclusive rights to publish video games using the trademarks and other intellectual property of “the only viable sports football associations and leagues in the United States.” Complaint at 3. Indeed, while the Sega-produced NFL 2K video game had made inroads into Madden’s dominant market share, Electronic Arts signed an exclusivity deal with the NFL that made Madden NFL the only video game allowed to use NFL team and player names. That exclusivity arrangement was the crux of the plaintiffs’ allegations of antitrust violations. See generally id.
Critical to providing the plaintiffs with settlement leverage was the 2009 defeat of Electronic Arts’ motion to dismiss, despite the court having applied the U.S. Supreme Court’s heightened standards for antitrust pleading under Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). See Pecover v. Electronic Arts, Inc., 633 F. Supp. 2d 976 (2009). The court ratified the essence of the plaintiffs’ allegations, holding that the “Plaintiffs allege that EA’s exclusive agreement with the NFL ‘killed off’ the only other allegedly competitive interactive software and allowed EA to raise its prices ‘dramatically.’ [Citation omitted.] For purposes of pleading the claims at bar, these allegations suffice to allege a product market.” Pecover, 633 F. Supp. 2d at 981.
Class members include all consumers who bought a new copy of an Electronic Arts Madden NFL, NCAA Football, or Arena Football video game for Xbox, Xbox 360, PlayStation 2, PlayStation 3, GameCube, PC, or Wii, with a release date of January 1, 2005 to June 21, 2012. Under the agreement, the $27 million settlement fund will be distributed according to class members’ eligible purchases, with one class of purchasers receiving a $6.79 reimbursement per game purchased, up to a maximum of $54.32, while a second class of purchasers could receive up to $15.60. Because the purchaser classes are not mutually exclusive, some class members could receive approximately $70 in compensation for Electronic Arts’ monopoly pricing advantage.
The settlement has been preliminarily approved, and notice sent to the class members. The opt-out and objection deadline is set for December 10, 2012, and the Final Approval Hearing is set for February 7, 2013.