Electronic Arts (EA) surrenders in Class Action Lawsuit.
In June 2008, Electronic Arts, Inc (EA) was the subject of a national class-action lawsuit. EA is the company behind popular sports games such as Madden NFL, NCAA Football, and Arena Football. The lawsuit claimed that EA violated antitrust laws. Antitrust laws protect customers from unfair competition tactics by businesses and corporations. In this case, EA had exclusive contracts with the NFL, NCAA, and Arena Football League. These contracts created an illegal monopoly on producing games related to those franchises. The games spanned across various consoles such as GameCube, PlayStation 2/3, Xbox/360, Wii and Windows PC. Through the monopoly, EA price gouged consumers resulting in overcharges for the games. With no other competitors to contend with, EA made billions of dollars off of this niche market. At the time, Madden NFL games were among the bestselling in the nation with four spots in the top ten.
On December 21, 2010, the federal court certified the lawsuit. By July 2012, the EA reached an out-of-court settlement for $27 million in repayment. The settlement covered Madden NFL, NCAA Football, and Arena Football games released between January 1, 2005 and June 21, 2012. It did not include mobile phone versions of the games. Reimbursements ranged from approximately $6-$20 per game copy.
“We’re gratified by the ruling, and believe it underscores how lucrative and exclusive agreements in the video game industry can come with an inflated price tag for consumers,” said Steve Berman, managing partner of Hagens Berman.