Federal Judge: Madden Monopoly Suit May Proceed Against EA

June 8, 2009 -

A U.S. District Court Judge in San Francisco has ruled that monopoly claims filed against Electronic Arts by a pair of Madden buyers may continue.

EA had previously requested that Judge Vaughn Walker dismiss claims by Geoffrey Pecover and Jeffrey Lawrence. The two Madden buyers, serving as named plaintiffs in the class-action suit, alleged that by eliminating competition for NFL-licensed games EA had acted in a monopolistic fashion and unjustly enriched itself at the expense of consumers. On Friday Judge Walker issued a ruling denying EA's motion. The Judge did, however, rule that only claims in California and Washington, D.C. would go forward since that is where the two named plaintiffs in the case reside.

Significantly, in turning down EA's request to dismiss, Judge Walker wrote that "interactive video football software" is a recognizable product market for anti-trust purposes:

As the court understands these allegations, interactive football software will not sell if it does not use the names, logos and other markers of teams that actually compete in the NFL; there is, in effect, no market for interactive football software in a virtual or fictitious setting. If true —— as the court must at this point accept —— this adequately alleges that there are no substitutes for interactive football software without the markers of actual teams and players.

The suit, essentially following a line of reasoning laid out here on GamePolitics, describes how EA, faced with competition from Take-Two's excellent NFL 2K5, reduced the price of Madden from $49.99 to $29.99 in order to stay competitive with NFL 2K5, which was aggressively priced at $19.99. However, once the exclusive NFL and NFLPA deals were inked, the unlicensed NFL 2K series was discontinued and EA, facing no competition, jacked the price of Madden back up to $49.99.

DOCUMENT DUMP: Grab a copy of Judge Walker's ruling.

SEE ALSO: Spirited courtroom argument in Pecover vs. EA... Read all GamePolitics coverage of Pecover vs. EA...


Comments

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

Looking at sales in 1995 is not the correct time frame. If the difference in revenue was only $1, why would EA pay between $300-500 million dollars for only a 5 year deal? This is because EA was worried about competition at the $19.99-29.99 price point, as EA did not know how long they would need to lose the $20 per sale. Finally the NFL gave in once EA forked over the high price tag for the exclusive license. EA wants all other developers to fall so far behind that in the development for a NFL game, that after the exclusivity deal ends, the entry costs for a firm will be too high to incur, especially for the more advanced technology of the PS3 and 360.


Also there is no IP being transferred here. It the right to use NFL players stadiums etc. Antitrust law wants to encourage competition, and here competition is being foreclosed by EA. Also by EA getting the exclusive license, the only benefit they get is they get to increase the price. The consumer gets no benefits, and when an exclusivity deal creates no efficiencies and only an increase in price, the deal will be scrutinized. 

 

Also the argument that a buyer should just wait untill a price drop or don't buy at all, is what antitrust law wants to prevent. Antitrust law wants people to buy items and for competition to flouirsh so to maximize production and consumption.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

Well i wish thses two good luck, we do need some more competiction in sport games.

http://www.magicinkgaming.com/

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

A much as I think that there should be more than one title, I think that corporations also have the right to have exclusive partnerships.  I mean, if Fox, ABC, NBC, ESPN, or CBS decides to sign a contract with the NFL to exclusively show the Super Bowl for the next 5-7 years, I don't think that Fox, ABC, NBC, ESPN, or CBS should have the right to sue whoever has the exclusive rights just because they want to show it.

Exclusivity can be a good thing and it can be a bad thing.  I think that the Madden and NFL exclusitivity is a bad thing but I don't like the precendent that this lawsuit could set.

http://www.deathvanquished.com

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

The problem with your analogy is that it is fallicious. The super bowl is a single event. If one of those stations were the only ones allowed to cover every single game of the NFL season, then your analogy would be proper.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

My point was that companies should be able to get into exclusive deals.  They may be bad for the consumer but it is well within their right.  The release of Madden is a one time even but if I must change my analogy then it is well within the NFL's right to put all of its content on the NFL Network.  Yes, it would be bad for the consumer and all of the flak with the NFL Network is that not every affiliate has access to it and most cable companies argue if it should be a basic or premium channel.  The NFL would pretty much destroy themselves if they did it, but it is well in their right as a company to do so.

 

http://www.deathvanquished.com

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

"They may be bad for the consumer but it is well within their right"

No they aren't. This is why they are being (somewhat successfully) sued left right and centre. If they are within their rights, then why are there monopoly and anti-trust laws?

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I LIKE the fence. I get 2 groups to laugh at then.

-------------------------------------------------- I LIKE the fence. I get 2 groups to laugh at then.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

As a matter of pure antitrust law, there's nothing wrong with exclusive contracting. Copyright holders license their products on an exclusive basis all the time. Exclusivity ceates market benefits for the licensee for which they've usually paid a whopping premium to the licensor. And that's all well and good. What the antitrust laws are intended to combat, in part, is monopoly market share (i.e., the ability to control supply and therefore set prices). Holding exclusive rights may help the monopolizer gain monopolistic market share but the mere fact of exclusivity isn't illegal - in fact, it's protected by copyright and other intellectual property law. It's the ability to circumvent the market forces of supply and demand in setting prices which shafts the consumer and is therefore illegal. 

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

Holy poop!!!

As an avid fan of 2K5 back in the day and tired of the sthick that was Madden year in and year out (not to mention a fan of competition), I am exicted for the prospects of this suit.

Perhaps 2K sports will live again, or someone else will come forward to challenge and overthrow that which has put video game football in stagnation.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

I may as well make an Australian Rules Football game that only uses the clubs emblem. Not their city names.

Cats, Dogs, Crows, Magpies, Blues, Eagles, Kangaroos and so on. Using fake players with fake names. As long as the game plays well like International Superstar Soccer 64 did for world football games it will be ok.

I would rather be doing that instead of being stuck in legal fees because I wanted to use real players and real legendary names to sell a Football game.

 

TBoneTony

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

I don't know about Australian Rules football, but an American football game like you propose (fake players, no city names, just the club emblems) would still fall foul of EAs monopoly. Specifically, the club emblems are registered trademarks, and can't be used to sell a product without the owners' permission (which is, for the time being, granted to EA exclusively with regard to games).

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

This explains why competition almost always works in favor of the consumer.

When there is competition, companies try to undercut one another and the consumer can go for a better price if they so choose.

Without competition, the company can charge whatever they want, and if you want to enjoy the product you gotta pay the price they ask.

Not to mention that without the competition from 2K sports EA has absolutely no reason whatsoever to offer up a better Madden every year. They could change one or two faces or one or two teams i nexistign game data, re-release it, andn o one has a choice but to get it if they wnat an official footbal lgame.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

$50 is still cheap for a current gen game though.

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Believe in something! Even if it's wrong, believe in it! -Glenn Beck

-------------------------------------------------------- Believe in something! Even if it's wrong, believe in it! GET OFF MY PHONE! -Glenn Beck

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

That's a matter of opinion...

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Papa Midnight
http://www.thesupersoldiers.com

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Papa Midnight

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

It's not necessarily about the prices, it's about consumers wanting choice, and right now, there is little choice. Sure a footbal lgame without official palyers and teams can be made, and it hasb een ,but it sold horribly for not having the liscense, as that's what people want. People used to have a choice, but now don't, and EA is reaping the benefits.

And EA deserves it for their stunt in tying ot acquire Take Two to get at 2k sports. Would have only been a matter of time before they went after Sega to get their sports devision.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

Yeah, its about choice and quality of game.  EA makes crap games when they know they dont have to try.  Hell, just look at Sims 3, taking out important basic features of Sims 2 just to turn around and sell them back to people later in expansion packs, just because they know people will pay.  Part of it is smart business, but another part is just raping consumers because you know you wont try hard enough to produce anything of value worth buying other than those old features coming back.

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Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

Whenever it's something bad about a game it's always EA. Whenever it something good about the game it's always Maxis.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

As opposed to EA who would prefer everyone to forget it's a Maxis game at all.

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I LIKE the fence. I get 2 groups to laugh at then.

-------------------------------------------------- I LIKE the fence. I get 2 groups to laugh at then.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

I'm pretty sure they acknoledged Bioware as Bioware at E3, and didn't go like "EA is making Mass Effect 2!"

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

Mhm, as I said below, no competition means no incentive to offer up a better product.

Re: Federal Judge: Madden Monopoly Suit May Proceed Against ...

just like, some people want all the companies to team up, to make only one video game console, but if they did, we'd probably get something that cost them five dollars to make, but they'd still chrage us 1000 dollars to buy it, and if we wanted to play video games we'd have to get it.
 
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