EA files $27 million settlement in lawsuit, cannot renew current NCAA license [Update]
Electronic Arts reached a settlement in a class action lawsuit that dates back to 2008 for $27 million, and will be unable to renew its exclusive agreement with the NCAA, providing the court upholds the settlement terms.
The original lawsuit claimed that EA violated antitrust laws by entering exclusive license agreements with the NFL, NCAA, and AFL. The $27 million settlement fund proposed by EA would, in part, benefit those that purchased any EA Sports football game from January 2005 to today. Specifically, customers that bought any of the included GameCube, Xbox, and PS2 games may get up to $6.79 per game, and $1.95 per Wii, Xbox 360, and PS3 game.
EA also agreed to stipulations on future license agreements as part of the proposed settlement, as it will not make any exclusive licensing deals with the AFL for five years, and will not renew its current agreement with the NCAA. Additionally, EA won't be able to enter another exclusive licensing agreement with the NCAA for five years. The company's exclusive NFL trademark licensing deal remains untouched in the proposed settlement, which awaits final approval by the court on September 27.
Update: As a clarification, EA Sports' future NCAA license will be non-exclusive. EA sent us the following statement: "We made a business decision to settle this lawsuit and put the matter behind us. We look forward to continuing our partnerships with the NFL and NCAA."
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$27 Million Settlement Announced in EA Madden Price-fixing Lawsuit
SAN FRANCISCO – 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.
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.
Consumers can learn more about this case by visiting www.hbsslaw.com/maddennfl. You can also contact Hagens Berman, lead-counsel in the action, by emailing maddenNFL@hbsslaw.com.
A copy of the proposed settlement is available here.
About Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with offices in ten cities. Founded in 1993, HBSS continues to successfully fight for consumer rights in large, complex litigation. The firm has been named one of the top plaintiffs' law firms in the country five times by the National Law Journal. More information about the law firm and its successes can be found at www.hbsslaw.com.
