SAN FRANCISCO (CN) – With a class-action settlement in the works, Electronic Arts has voluntarily given up some of its hold on the market for football video games.
Click here to read Courthouse News’ Entertainment Law Digest.
The Redwood City, Calif.-based developer agreed to wait five years before seeking renewal of exclusive licensing deals with the National Collegiate Athletic Association and the Collegiate Licensing Company that are set to expire in 2014.
After four years of litigation, the game developer will pay $27 million to a class of gamers who claimed that these agreements monopolized the market for football video games and drove up prices.
EA will keep its licensing deal with the National Football League, but it will wait five years to do the same with the Arena Football League after that exclusive trademark license lapses.
In a 2008 complaint, Geoffrey Pecover and Jeffrey Lawrence claimed that EA’s agreements with the NFL, NCAA, CLC and AFL killed off competing football games. Left in control of the market, EA allegedly jacked game prices to up to $60 per unit.
Settlement talks with EA started in July 2011. The proposed deal offers cash payments of either $1.95 or $6.79, depending on the type of video game title, to consumers who bought “Madden NFL,” “NCAA Football” or “Arena Football League” between January 1, 2005, and June 21, 2012.
Continued litigation would likely take any award for consumers off the table, according to the agreement.
Electronic Arts challenged several aspects of the class action, including the allegedly too-narrow characterization of a relevant market. It also said that there was no proof of above-market pricing.
U.S. District Judge Claudia Wilken is expected to look at the settlement on Sept. 27, 2012.