EA Settles Price Fixing Lawsuit For $27 Million; NFL Monopoly Left Intact

from the there's-no-'innovate'-in-'exclusive-contract' dept

EA Games has agreed to a $27 million settlement for charges of price-fixing related to its NFL, NCAA and (lawl) Arena Football League games. While this may come as somewhat a relief to purchasers of EA games, it's highly unlikely that this will result in EA changing its core strategy. It certainly doesn't seem to have had any affect on EA's exclusive license with the NFL (which continues through 2013), a deal that was the impetus for this lawsuit.

First off, the settlement sounds super-big, but in reality, it breaks down to couch change for those people who were "fortunate" enough to make a "recent" purchase of one of the named EA Sports titles.
Those who bought games for a PlayStation 2, original Xbox or Nintendo GameCube could receive up to $6.79 per title. Games purchased for the PlayStation 3, Xbox 360 and Nintendo Wii will garner a $1.95 refund, reports USA Today.
The named platforms call to question the term "recent," which is used in the original USA Today article on the subject.
In a statement, law firm Hagens Berman says EA will create a $27 million fund for players who purchased a recent copy of any Madden NFL, NCAA Football or Arena Football title.
The larger payout for older platforms is likely due to the event that led to EA locking down an exclusive deal to publish Madden Roster Update as the sole representative of the National Football League.

Way back in 2004, 2K Sports released ESPN NFL 2K5 at the extremely friendly price point of $19.99, or under half the price of EA's game, which debuted at the normal $50. Not only did it beat Madden in the price war (and force EA to drop Madden's price to $29.99), but in many critics' estimation, it was a superior game, especially in terms of presentation.

EA felt threatened by this move and responded the way any corporation that would go on to hold the title of "Worst Company in America" would: by throwing its considerable weight around and locking down an exclusive deal with the NFL. No doubt the NFL was also worried, having momentarily been associated with a budget-priced game. Hence, nothing but Madden until 2013 and this lawsuit, which was filed in 2010.

The NFL's vice president of consumer products, Gene Goldberg, said at the time that he wasn't concerned that EA's monopoly would result in stagnation, stating that there is "a lot of self-imposed pressure to make [Madden] stand out in a robust and diverse marketplace." Maybe so, but I would imagine that EA's flagship football game would have improved much more dramatically with a high-quality competitor constantly breathing down its (overpriced) neck. 2K Sports' product was so far ahead of Madden at the time that gamers still find it to be a better experience than Madden 11.

This isn't EA's only NFL-related lawsuit, either. U.S. District Judge Richard Seeborg just gave the go-ahead for former NFL players to seek class-action status in their lawsuit against EA for using their likenesses in Madden NFL games. EA had hoped to avoid this sort of situation by stripping names and shuffling jersey numbers, but the retired players pointed out that their digital alter egos were accurate in terms of skills and physical appearance.

EA played the "stats are facts" card, quoting an earlier decision that saw Major League Baseball being told that player names and statistics are facts, and therefore cannot be copyrighted. Seeborg's ruling dismissed this claim, stating that current publicity rights laws and pointing out that Madden games show the retired players "in their conventional role as football players" and is the "digital equivalent" of "using the players' pictures to sell T-shirts." 

Speaking of "couch change," the proposed settlement pales in comparison to the damages originally sought in the price-fixing lawsuit, which alleged that without the exclusive NFL deal, Madden would have been forced to price its games at a more reasonable $29.99, rather than the $50-60 we're all kind of tired of paying. This difference resulted in gamers paying an extra $701-926 million for EA sports games between 2005 and 2010.

But $27 million it is. Gamers shouldn't start counting that incoming couch change just yet though. This settlement still needs to be approved by the court, a move which could take months. While this might be of some consolation to the gamers who filed the suit, it feels more like a gesture of hands-folded-politely compliance, as if to show that EA is a "Good Corporate Citizen" and, as such, is worthy of its continued NFL-granted monopoly. And despite its exclusive client currently "entertaining" two lawsuits, the NFL doesn't seem to be interested in shopping around for new suitors, leading one to believe that it really doesn't care much for non-exclusive deals... or for its former players.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Jul 27th, 2012 @ 5:47pm

    The same game as last year with a new roster isn't worth 60$?

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    gnudist, Jul 27th, 2012 @ 5:52pm

    Re:

    Shocking I know.

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Anonymous Coward, Jul 27th, 2012 @ 6:47pm

    Wait so gamers were ripped off for $701-$926 million but EA only has to pay $27 million in fines? Wtf... I suppose to EA this is just part of doing business...

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    Anonymous Coward, Jul 27th, 2012 @ 7:10pm

    I'm still pissed about their monopoly causing the Gameday franchise to fold. I always felt it was far superior to Madden back in the day. Would love to see how it would have progressed over the years since.

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Jul 28th, 2012 @ 12:15am

    You need to cover how EA's stocks have been in free-fall since this came up and how EA has had a major shareholder meeting which I'm sure ended with a few CEOs being dragged behind their own limousines.

     

    reply to this | link to this | view in thread ]

  6.  
    identicon
    Anonymous Coward, Jul 28th, 2012 @ 4:50am

    So a private (as in not government) company (EA) paid another private company (NFL) to be an exclusive license holder? It's good that this was stopped now.

    I'm a big Spiderman fan. I'd hate for this evil tactic of licensing other peoples properties to make it so that Sony had a monopoly on Spiderman movies and Activision had a monopoly of Spiderman games.

    Seriously, if this had went to trial and EA lost would that mean that every license is invalid?

     

    reply to this | link to this | view in thread ]

  7.  
    icon
    drew (profile), Jul 28th, 2012 @ 8:25am

    Re:

    It is an interesting one isn't it? Without knowing anything else about the case it's hard to see exactly what the problem is here.
    Also, it's hard to argue with the stats-as-facts argument - if they're not facts then they're not very good stats.
    Players physical features I can understand the reasoning on though.

     

    reply to this | link to this | view in thread ]

  8.  
    identicon
    Anonymous Coward, Jul 28th, 2012 @ 9:01am

    Re:

    No, because the entire license is not being disputed. The NFL/EA deal is a huge monstrosity. Parts of copyright are being disputed. No one is disputing the NFL or Teams trademarks.

    Even if by some warped out logic it was decided the NFL had no copyright claims to stand on at all, period. The trademarks would still hold and block other game makers from releasing an NFL Football game.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Jaerys, Jul 28th, 2012 @ 9:51am

    Contract Lapse

    I heard that EA has to let its contract with the NCAA and AFL lapse for five years. Still, they retained their NFL license so they probably call it a win.

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    Mason Wheeler, Jul 28th, 2012 @ 9:02pm

    Not surprising

    Well, considering the NFL's long history of willingly hiring known criminals as players and coaches, and doing everything possible to cover up and their crimes from the media and the public so long as said criminals are profitable for them, is anyone surprised that they're just fine with sleazebags like EA?

     

    reply to this | link to this | view in thread ]

  11.  
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    vegetaman (profile), Jul 29th, 2012 @ 2:04pm

    Re:

    If the penalty is always just a fraction of the reward (in this case, what, less than 5%?), then why in the hell would businesses ever STOP doing it?

     

    reply to this | link to this | view in thread ]

  12.  
    icon
    Ninja (profile), Jul 30th, 2012 @ 4:15am

    I've dropped any title with ElectronicArts related to it. Much like Ubisoft and others that fuck up the their customers. I couldn't dump Blizzard yet. Let us see what the next WoW expansion will do, the beta was frustrating for my shaman.

    In any case, it's about time ppl started voting with their wallets. Obviously EA and the likes will complain about piracy but it's all about doing reall financial damage against these.

    SquareEnix is going down the drain. They got so arrogant and mistreated their customers so bad that they finally felt the weight of their attitude.

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Anonymous Coward, Jul 30th, 2012 @ 8:59pm

    Re: Re:

    Micheal Jordan is black, has a bald head, and a weird Hitler mustache. Are what people look like not also facts?

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    GKing88, Mar 13th, 2013 @ 11:12am

    EA Lawsuit

    NFL should get out of bed with EA and jump in to bed with 2K sports 2K make better sports games I think also NCAA college Basketball should be on 2k Sports college b-ball to NBA hoops would be crazy on the 2k system

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    Wonka Joe, Apr 16th, 2013 @ 9:57am

    I told u so

    I told as many ppl I could to stop playin nba live when 2k came out wit iverson on cover and samething when 2k came out wit Terrell Owens on cover EA SPORTS should've been folded their sports division they suck and they are gaming mafia thugz I hope america is watching

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    jason buil, Dec 16th, 2013 @ 10:55pm

    madden 25 the worst unrealistic football game no different 99 madden

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    jason buil, Dec 16th, 2013 @ 10:55pm

    madden 25 the worst unrealistic football game no different 99 madden

     

    reply to this | link to this | view in thread ]


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