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October 24, 2012 / Nazareth M. Haysbert

$27 Million Settlement Reached in EA Sports Football Video Game Class Action Lawsuit

A preliminary settlement has been reached in a class action lawsuit against Electronic Arts, Inc., (“EA Sports”), the developer of sports video games such as Madden NFL, NBA Live, Tiger Woods PGA Tour, and FIFA.  The class action lawsuit alleged that EA made an unlawful and anticompetitive series of exclusive agreements with the National Football League, the NFL Players Union, Arena Football League and the National Collegiate Athletic Association (“NCAA”), enabling EA Sports to monopolize the football video game market, drive out competitors, and ultimately price-gouge customers on sports video games.

Federal and California Antitrust laws, including the Sherman Act, the Cartwright Act, and California Business & Professions Code §§ 17200 et seq.,prohibit companies from controlling prices, monopolizing markets for products, or engaging in conduct which excludes competition.

EA Sports denied the allegations, but decided to settle the class action lawsuit, entitled Geoffrey Pecover v. Electronic Arts, to avoid further litigation. Under the terms of the settlement, EA Sports has agreed to establish a $27 million fund to compensate consumers who purchased Madden NFL, NCAA Football and AFL games between January 1, 2005 and the present. Consumers can be reimbursed up to $6.79 for each purchase of a sixth generation title game developed for the GameCube, PlayStation 2, or Xbox platforms, and up to $1.95 for each purchase of a seventh generation title game developed for the Wii, Xbox 360 or PlayStation 3 platforms, upon the submission of a valid claim. The reimbursement amounts are subject to pro rata reductions if the claims for payment exceed the settlement fund.  EA Sports also cannot renew its exclusive agreement with the NCAA, and must agree not to sign an exclusive license agreement with the AFL for another five years.

Once the settlement is approved by the Court, class members who submit a claim form by March 5, 2013 will be eligible to participate in the settlement. Anyone who wants to object or exclude themselves from the settlement must do so through letter, postmarked by December 10, 2012.  The final Approval Hearing is scheduled for February 7, 2013 at 2:00 p.m. in Courtroom 2 of the Oakland Courthouse of the United States Federal District Court for the Northern District of California.

If you or a loved one feels they have been injured by anticompetitive sales practices, please contact Khorrami, LLP for a confidential evaluation of your rights.

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