A Thought Exercise: Is EA’s Tying of NBA Elite 11 to NBA JAM Anticompetitive?

It is too early to tell if EA’s tying of NBA Elite 11 to NBA JAM is anticompetitive. There are simply not enough facts about sales, jurisdiction, etc. in a press release to be certain. Indeed, there has been no sale yet. However, the scenario is an interesting thought experiment. The language under scrutiny is:


“To make NBA ELITE the ultimate basketball experience for you, we will be including three modes of NBA JAM for FREE with NBA ELITE 11. That’s right, not only will you be getting NBA ELITE 11 when you buy the game, but you will also have NBA JAM available as well — so for the price of one game, you’re getting two full NBA experiences. Another important note to share with all of you — the ONLY way you will be able to play NBA JAM for the PS3 is to buy NBA ELITE 11.”

(http://blog.us.playstation.com/2010/08/03/nba-elite-11-for-ps3-new-controls-and-nba-jam-confirmed/ August 3, 2010).

Reboot of NBA JAM

The elements of tying are (1) two separate products or services are involved; (2) the purchase of the tying product is conditioned on the additional purchase of the tied product; (3) the seller has sufficient market power in the market for the tying product; (4) a not insubstantial amount of interstate commerce in the tied product market is affected.

Before considering the elements, it must be mentioned that EA probably has the exclusive rights to both games. As such, this scenario does not neatly fit into usual tying scenarios where Company A ties products Y and Z so that consumers do not purchase a similar product Y from Company B. Here, consumers cannot purchase NBA JAM (or something similar) anywhere else. As such, who will be alleging they have sustained damages? It probably would be hard to argue that NBA JAM is similar to another basketball game because the enjoyment of the NBA JAM stems from the brand and the gameplay.

Considering the first element, NBA Elite 11 is a separate product from NBA JAM. Specifically, the two are different games. The language “for the price of one game, you’re getting two full NBA experiences” is helpful here. As such, the first element is satisfied.

Considering the second element, EA is offering NBA JAM for free. As such, there is probably not a purchase of NBA JAM. Specifically, a purchase for zero dollars cannot be a purchase per se. The language “we will be including three modes of NBA JAM for FREE with NBA ELITE 11” is helpful here. As such, the second element is probably not satisfied.

The assumption should be made that costs for development of NBA JAM will not be directly factored into the price of NBA Elite 11. Otherwise, a bookkeeping trick would subvert the intent behind prohibition of tying. To illustrate, suppose NBA Elite 11 was originally intended to be priced at $40.00 and NBA JAM was originally intended to be priced at $20.00. To offer NBA JAM for free on condition of a $60.00 purchase of NBA Elite 11, while simultaneously arguing that there is no purchase of NBA JAM, would be an example of a bookkeeping trick subverting the intention behind the prohibition of tying.

NBA JAM

Considering the third element, the tying product is NBA JAM because the “sale” of NBA JAM is conditioned on the purchase of NBA Elite 11. This comports with traditional notions of tying because NBA JAM has more cachet than NBA Elite 11. The language “the ONLY way you will be able to play NBA JAM for the PS3 is to buy NBA ELITE 11” is helpful here. EA has sufficient market power due to having the exclusive license for NBA JAM and due to EA’s size within the basketball game market, the sports game market, and the video game market. As such, the third element is satisfied.

Considering the fourth element, EA is probably planning to offer discs of NBA Elite 11 (the tied product) for sale in every state. Used-game sellers in every state will also probably carry NBA Elite 11. As such, the fourth element is satisfied. It will probably not matter that NBA JAM may be download-only because NBA JAM is not the tied product. Even if it did matter, a download server in a state different from the download computer would probably be within the purview of interstate commerce.

EA’s tying of NBA Elite 11 to NBA JAM is probably not anticompetitive because EA probably owns the exclusive rights to NBA JAM and there is no purchase of NBA JAM. Rather, NBA JAM is being offered for free with the purchase of NBA Elite 11.