Electronic Arts is having to cope with one of those class action suits that major corporations suffer from all the time. This one concerns the pricing of American football games - specifically the Madden
series. It could also have a large impact on EA's bid for Take-Two.
It comes at a superb time and with a great angle for Take-Two Interactive in its fight to fend of EA's merger/take-over bid.
Two State-side gentlemen, Geoffrey Pecover of Washington DC and Jeffrey Lawrence of California are taking EA to the courts over what they and their lawyers claim is EA's 'blatantly anti-competitive conduct."
Part of the class-action states, "Less than two weeks later (after EA had closed a set of exclusivity agreements with American football leagues and an association) Electronic Arts announced a $2 billion offer for Take Two Interactive.
"A successful takeover of Take Two Interactive by Electronic Arts would remove one of the few companies with the ability and expertise to compete in the market for interactive football software in the event that Electronic Arts exclusive agreements were terminated or voided by a court."
This coming, of course, from two independent individual gamers wanting justice and a competitive market could not really have come at a better time for Take Two, which is currently going toe-to-toe with the Federal Trade Commission
The gist of the claim is not specifically about Take Two of course. I is that the EA entered into 'an unlawful and anticompetitive series of exclusive agreements with the National Football League, the NFL Players Union, Arena Football League and National Collegiate Athletic Association (NCAA)'.
This enabled EA to up the price of Madden
games by 70% and -according to the claim - it enabled EA to drive out "its competition out of the market for interactive football software, including most significantly Take-Two Interactive Software Inc., the maker of interactive football software title NFL 2k 5
and has prevented additional competitors from entering the market'.
Regarding Take-Two (and SEGA's) game, the suit claims that, 'Three months after the entry of NFL 2k 5
into the market in November 2004, Electronic Arts lowered the price of Madden NFL
from $49.95 to $29.95". This, the suit claims was because, "Take Two priced the game nearly thirty dollars below the Madden NFL
title", and, "Faced with a serious competitor for the first time Electronic Arts was forced to lower its prices".
Bad news for gamers because, apparently, "This (Take Two's) vigorous competition benefited consumers. Electronic Arts could have continued to compete by offering a lower price and/or higher quality product. Instead Electronic Arts quickly entered into a series of exclusive agreements with the only viable sports football associations and leagues in the United States...' these were the NFL, AFL and NCAA.
(You can see the full complaint over at Gamepolitics