Electronic Arts Can’t Dodge Antitrust Suit

     OAKLAND, Calif. (CN) – Electronic Arts will have to face amended antitrust claims filed by 12 college athletes who accuse the video game company of duping them into signing away their rights to profit from their own images, a federal judge ruled.
     The antitrust action, originally filed by eight former National Collegiate Athletic Association basketball players, was consolidated with a publicity-rights complaint by four former college football players.
     U.S. District Judge Claudia Wilken granted Electronic Arts’ motion to dismiss it as a defendant in May.
     Wilken found that the athletes did not have enough evidence to show that Electronic Arts was part of a price-fixing conspiracy with the Indiana-based NCAA and or the Georgia-based College Licensing Company.
     The athletes filed an amended complaint two weeks later.
     They said Electronic Arts has a “unique relationship” with the NCAA, and that the company “used its high level of access to NCAA ‘to advocate and obtain agreement on making its NCAA-themed video games as photorealistic as possible.”
     The athletes also claimed Electronic Arts and the NCAA “colluded” to allow video game players to modify their likenesses and share their roster information online, and showed their names in advertisements.
     And they accused Electronic Arts of conspiring with the NCAA to refuse to pay former student athletes.
     Electronic Arts moved to dismiss the amended complaint, claiming the new allegations “do not imply EA’s participation in an unlawful antitrust conspiracy” and only concern its “rational, legitimate commercial efforts.”
     This time, Judge Wilken refused to dismiss the athletes’ claim that Electronic Arts went beyond simply following NCAA rules on not paying current players, by also promising not to pay former players.
     An agreement not to compensate former athletes exceeds the NCAA’s requirements, and is enough to show that Electronic Arts may have engaged in price-fixing to avoid paying former players, the judge wrote.
     “[It] appears that NCAA’s rules on amateurism have not prevented EA from compensating former student-athletes in limited circumstances,” Judge Wilken wrote. “Significantly, Plaintiffs allege that EA has entered into licensing agreements with some former student-athletes to use their images on the covers of EA’s NCAA video games, although not in the games themselves.”
     And the NCAA admitted in an April hearing that nothing in its rules prohibits former athletes from cashing in on their names and likenesses, according to the ruling, which the athletes claimed means Electronic Arts could pay former athletes, and could even promise money to current athletes, as long as it waited until after graduation to hand the money over.
     Electronic Arts said a promise to pay a current athlete at some point in the future would cost the athlete her eligibility to play. But it did not dispute the plaintiffs’ claim about its ability to pay former athletes, the ruling states.
     “The agreement not to compensate [former athletes] shows EA was not merely ‘doing business in the context of the NCAA’s amateurism policies.’ Instead, it suggests that EA was actively participating to ensure that former student-athlete would not receive any compensation for the use of their images, likenesses and names,” Judge Wilken wrote.
     The judge also said the athletes’ amended complaint suggests that Electronic Arts participated in a “group boycott conspiracy” by requiring athletes to sign agreements “purporting to relinquish all rights in perpetuity to their images, likenesses and names.”
     “Because student-athletes retain rights to their images, likenesses and names, and can license them once they are no longer student-athletes, EA’s alleged agreement not to offer compensation cold demonstrate its participation in the group boycott,” the judge wrote. “If EA had not made this agreement, its attempts to compensate former players for appearing in its video games likely would have undermined the ability of NCAA and CLC to continue their alleged boycott of former student-athletes.

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