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EA’s Exclusive Football Franchises Cost Millions in Lawsuit

Electronic Arts is on the verge of shelling out $27 million to its customers as part of a class action lawsuit brought upon the company in 2008. After four years of legal battles, and one failed attempt to dismiss the suit entirely, EA has decided to settle out of court, having reached an agreement with those representing its customers.

The lawsuit, filed in June of 2008, pertained specifically to EA’s establishment of exclusive licenses with the NFL, NCAA, and AFL (Arena Football League). These licenses granted the company sole rights to produce games using players, teams, and elements belonging to the respective leagues. Those who brought the suit against EA claim that the publisher has violated antitrust and consumer protection laws, establishing virtual monopolies with their Madden NFL, NCAA, or AFL Football games. According to Hagens Berman, the law firm representing the consumers, these exclusive agreements “nearly doubled the price of (EA’s) popular game, Madden NFL.”

If the court approves this settlement, EA will dole out $27 million to those who fall under the court’s certified “class of consumers,” decided upon in April of 2011. This group includes anyone (that’s right, anyone) who purchased any of the aforementioned games between January 1, 2005 and now. According to the proposed settlement, anyone who purchased a sixth-generation title (PlayStation 2, Xbox, or Gamecube) may be entitled to up to $6.79 per game, while those who purchased a seventh-generation title (PlayStation 3, Xbox 360, Wii) may receive up to $1.95 per game.

As the press release sent out by Hagens Berman states, the settlement also requires that EA not sign an exclusive agreement with the AFL for five years, and that it will not renew its current agreement with the NCAA for five years, when it expires in 2014.

Though both parties involved in the lawsuit seem to have agreed to the settlement, the court must approve the agreement before it is finalized. If it is approved, details will be made public regarding EA’s retribution payment.

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