EA Sports recently agreed to a settlement in a class action antitrust lawsuit that began in 2008 on behalf of consumers. The conduct that forms the basis for the lawsuit began as early as 2004. In 2004, Take-Two Interactive was a competitor of EA Sports, and was severely outmatched. In an effort to regain market share, Take-Two released their newest title, NFL 2K5, at a $20 price point. In response, EA was forced to lower their Madden title for that year from $50 to $30. EA was not please, to say the least.
In order ensure there wouldn’t be another underpriced season, EA Sports in 2005 reached out to the NCAA and the AFL, and was able to sign exclusivity agreements with both. As a result, Take-Two lost all of its official backing, and therefore all of its professional sports titles. In effect, EA Sports was able to team up with the NCAA to eliminate its main competition in the gaming industry.
As a result of the settlement, EA Sports has agreed to let their current agreement with the NCAA lapse in 2014, and to not sign any new deals with them for five years after that. EA also agreed to pay $6.79 per game to purchasers of GameCube, PS2, or Xbox games, and $1.95 per game to those who bought the current generation football games. All told, EA will have to pay out around $27 million to wronged customers who were forced to pay higher prices for games as a result of EA’s anticompetitive conduct.