A federal judge has given the green light to a lawsuit claiming that EA Sports violated antitrust laws by entering into an exclusivity agreement with the National Football League (NFL). That agreement, according to the plaintiffs, allowed EA to ward off competition and artificially inflate the price of its popular Madden NFL title.
The suit, originally filed in 2008, concerns an exclusivity agreement between the NFL and Electronic Arts, EA Sports's parent company. According to the suit, that agreement allowed EA to "[drive] its competition out of the market for interactive football software," and caused the price of Madden NFL to "soar from $29.95 to $49.99 as soon as the agreement was signed.
Things weren't always this way. In November 2004, EA lowered the price of Madden NFL to just $29.95, in what the plaintiffs say was an attempt to compete with NFL 2K5, a Sega-TakeTwo game that received "rave reviews" upon its release. The class contends that the "vigorous competition" between Madden NFL and NFL 2K5 -- which one reviewer called "one of the finest sports experiences I've had the pleasure of enjoying" -- was good for gamers.
Alas, the exclusivity agreement, which was reached in 2005, allowed EA to develop a "stranglehold on the market for interactive football software," according to the suit, since "consumers demand that the teams and players in interactive football software be identified with actual teams and players." The agreement thus meant curtains for NFL 2K5 -- and for the prospect of consumer choice among interactive football software.
Suit fit for class treatment, judge says
"The overarching substantive issue presented is common to all ... members of plaintiffs' proposed class," Judge Walker wrote, namely, "whether EA's series of exclusive licensing agreements ... choked off competition in a way that is not legally sanctioned and whether, as a result of EA's conduct, [the] plaintiffs suffered injury."
Hagens Berman, the firm representing the class, heralded the decision.
"We believe EA forced consumers to pay an artificial premium on Madden NFL video games," Steve Berman, an attorney with the firm, said in a statement. "We intend to prove that EA could inflate prices on their sports titles because these exclusive licenses restrained trade and competition for interactive sports software."
The class alleges unjust enrichment; violations of several California consumer protection statutes; and violation of the Sherman Act, the federal antitrust statute. The plaintiffs are seeking compensatory and punitive damages, as well as "disgorgement of illegal profits received ... as a result of the [alleged] anticompetitive conduct."
Madden NFL, launched as John Madden Football in 1988, has become the gold standard among sports games, and has sold over 85 million copies since its debut.