Madden Price-fixing Lawsuit May Cost EA $27 Million

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Attorneys representing purchasers of Electronic Arts, Inc. (NASDAQ: ERTS) (“EA”) football video games have reached a proposed settlement over claims that the gaming giant violated antitrust and consumer protection laws and overcharged consumers for the games.EA Sports

The case, originally filed June 5, 2008, in the United States District Court for the Northern District of California, alleges that EA violated antitrust and consumer protection laws by establishing exclusive license agreements with the National Football League (NFL), National Collegiate Athletic Association (NCAA), and the Arena Football League (AFL). The agreements gave EA the exclusive right to produce football video games with the teams, players and other assets of the NFL, AFL and NCAA, the lawsuit states.

The proposed settlement, filed with the court on July 19, 2012, would establish a $27 million fund for consumers who purchased Madden NFL, NCAA Football or AFL games published by EA. If the settlement is approved by the court, consumers who purchased a sixth generation title (GameCube, PlayStation 2, and Xbox) may receive up to $6.79 per game. Those who purchased a seventh generation title (Wii, Xbox 360 and PlayStation 3) may be entitled to as much as $1.95 per game under the terms of the proposed settlement.

It also stipulates that EA will not sign an exclusive license arrangement with the AFL for five years and will not renew its current agreement with the NCAA, which expires in 2014, for at least five years.

“After more than four years of hard-fought litigation, we have reached a settlement that we strongly believe is fair to consumers,” said attorney Steve Berman, managing partner of Hagens Berman, the law firm representing consumers. “We look forward to moving this process forward and asking the court to approve this settlement, which we think is in the best interests of the class.”

On April 6, 2011, the court certified a class of consumers in the case, including all persons who purchased Madden NFL, NCAA Football or AFL games published by EA between January 1, 2005, and the present.

The proposed settlement must be approved by the court before it is final.

A copy of the proposed settlement is available here.

In : PC

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