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Pecover v. Electronic Arts class action settlement objection

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Electronic Arts was facing a great deal of competition for its Madden NFL games from Sega and other video game makers, and was forced to lower its price. So it purchased an exclusive license to make games using NFL logos, essentially creating a monopoly, since few would spend development money to create a game without the ability to sell the realism of an NFL experience. This may or may not be actionable under antitrust laws, but it did result in a class action. The resulting settlement has gotten much criticism from the technology and gaming press for letting EA keep its exclusive license, but the settlement is even worse than they report. When all is said and done from the claims process, consumers will likely end up with under a million dollars, while the attorneys are requesting $9.2 million for themselves. Even if we were to assume the entire $27 million settlement fund is "class recovery" (and how can we when over 95% of it is going to people who aren't class members?), the $9.2 million is over 34% of the fund, several million dollars higher than the Ninth Circuit benchmark. As a member of the class who got his inspiration for my current gig when I objected to a similarly bad video game class action settlement, how could I ignore such unfairness? The Center for Class Action Fairness filed an objection Monday.

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Isaac Gorodetski
Project Manager,
Center for Legal Policy at the
Manhattan Institute
igorodetski@manhattan-institute.org

Katherine Lazarski
Press Officer,
Manhattan Institute
klazarski@manhattan-institute.org

 

Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.