Re: Maddens legal battle starts today 09/14/2009!
A few quick points on this issue, some of which respond to various posts made earlier in this thread:
1. Several of you have argued that EA doesn't have a monopoly over football video games. Technically that's true, but the point is that the only viable market for football video games exists in the market for NFL football video games; thus, a monopoly over NFL football games (which EA arguably does have) is essentially a monopoly over all football games. Like many cases of this kind, it really comes down to market definition; if the relevant market is defined narrowly, EA could very well lose. And just looking at the anecdotal evidence (i.e. NFL2K5 was great and $20; EA scooped up exclusive license and 2k went away for good and EA still charges $60 for Madden) gives rise to possible arguments that EA engaged in anticompetitive conduct to drive 2k from the football game market, which also resulted in harm to consumers (since we no longer have the option of a $20 football game and now can only buy the $60 game), both of which are antitrust law violations even in some cases where a monopoly doesn't exist.
2. I think the better argument here is that it's not EA, but the NFL that is violating the law by only licensing rights to video games to one company. You could argue that the NFL license is a necessary input in the production of a football video game (since non-licensed games won't sell), and thus the NFL and EA have colluded to create impassible barriers to entry in the football video game market by creating the exclusive license. No competition is possible in this field, because the NFL has shut out all other potential market entrants by granting exclusivity to EA. That is truly an antitrust violation.
3. The case in the OP might essentially be over before it even goes to trial. The Supreme Court is hearing the American Needle case (briefs due tomorrow), and the outcome of that will go a long way to deciding whether the NFL can legally issue the exclusive license or not. The core issue in that case is whether the NFL can act collectively as one entity to issue exclusive licenses (in that case it's the license for official team apparel), or where each team must be treated as a separate legal entity that needs to negotiate its own licenses individually. If American Needle wins (and it might--it's appealing a Seventh Circuit decision that takes a minority view; the majority of circuits that have decided similar cases have held what American Needle is arguing for), the NFL's authority to grant exclusive licenses would go away. In one sense it could be bad for gaming, because then any game company would theoretically need to negotiate a license agreement with each team (so if, say, the Dallas Cowboys wouldn't sign on, they wouldn't be in the game, even though all the other teams would be), but on the other hand it should open up competition and allow other game companies to obtain NFL team licenses.
A few quick points on this issue, some of which respond to various posts made earlier in this thread:
1. Several of you have argued that EA doesn't have a monopoly over football video games. Technically that's true, but the point is that the only viable market for football video games exists in the market for NFL football video games; thus, a monopoly over NFL football games (which EA arguably does have) is essentially a monopoly over all football games. Like many cases of this kind, it really comes down to market definition; if the relevant market is defined narrowly, EA could very well lose. And just looking at the anecdotal evidence (i.e. NFL2K5 was great and $20; EA scooped up exclusive license and 2k went away for good and EA still charges $60 for Madden) gives rise to possible arguments that EA engaged in anticompetitive conduct to drive 2k from the football game market, which also resulted in harm to consumers (since we no longer have the option of a $20 football game and now can only buy the $60 game), both of which are antitrust law violations even in some cases where a monopoly doesn't exist.
2. I think the better argument here is that it's not EA, but the NFL that is violating the law by only licensing rights to video games to one company. You could argue that the NFL license is a necessary input in the production of a football video game (since non-licensed games won't sell), and thus the NFL and EA have colluded to create impassible barriers to entry in the football video game market by creating the exclusive license. No competition is possible in this field, because the NFL has shut out all other potential market entrants by granting exclusivity to EA. That is truly an antitrust violation.
3. The case in the OP might essentially be over before it even goes to trial. The Supreme Court is hearing the American Needle case (briefs due tomorrow), and the outcome of that will go a long way to deciding whether the NFL can legally issue the exclusive license or not. The core issue in that case is whether the NFL can act collectively as one entity to issue exclusive licenses (in that case it's the license for official team apparel), or where each team must be treated as a separate legal entity that needs to negotiate its own licenses individually. If American Needle wins (and it might--it's appealing a Seventh Circuit decision that takes a minority view; the majority of circuits that have decided similar cases have held what American Needle is arguing for), the NFL's authority to grant exclusive licenses would go away. In one sense it could be bad for gaming, because then any game company would theoretically need to negotiate a license agreement with each team (so if, say, the Dallas Cowboys wouldn't sign on, they wouldn't be in the game, even though all the other teams would be), but on the other hand it should open up competition and allow other game companies to obtain NFL team licenses.
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