Bazaarvoice’s Acquisition of PowerReviews Violated Antitrust Laws

imgres-10Bazaarvoice has been found guilty of violating U.S. antitrust laws involving its $168 million acquisition of rival PowerReviews.
Judge William Orrick with the U.S. District Court for the Northern District of California issued the ruling last week following a three week trial which began on Sept. 23rd. The court has scheduled a hearing on Jan. 22 to discuss sanctions for the violation.
“By acquiring its only significant rival, Bazaarvoice deprived its customers of the benefits of competition,” Assistant Attorney General Bill Baer said in a news statement. “We are pleased that the court, after carefully weighing all of the evidence, agreed with the Justice Department that Bazaarvoice’s acquisition of PowerReviews was likely to extinguish price competition and substantially diminish the pace of innovation in the market for product ratings and reviews platforms.”
“As shown during trial, Bazaarvoice executives clearly intended to eliminate competition by acquiring PowerReviews,” according to Baer. “Consistent with Bazaarvoice’s own pre-merger view of the marketplace, the evidence presented at trial demonstrated that PowerReviews was a significant threat to Bazaarvoice and that other rivals are poorly positioned to fill the competitive void created by the merger.”
Austin-based Bazaarvoice bought PowerReviews in June of 2012. The Department of Justice began its investigation shortly after the deal closed and filed a civil lawsuit against the company on Jan. 10, 2013.
Bazaarvoice issued a news release stating that the company will not make a decision on whether to appeal the court’s ruling until it concludes the remedy phase of the litigation.
“We are disappointed in the outcome of the litigation. We believe that the merger with PowerReviews has been beneficial to customers, as did the more than 100 customers who testified that they did not believe that the acquisition affected them adversely in any way,” Gene Austin, president of Bazaarvoice, said in a news statement. “Throughout this process, our focus has remained on serving our clients and providing them with a full range of social software that helps them engage more powerfully with their customers. With the Court’s decision, we’ll now do everything we can to help ensure that the final order achieves the best outcome for our clients, shareholders, and employees.”
Founded in 2005, Bazaarvoice provides a software platform of online consumer reviews and ratings for online retailers including Dell, Best Buy, Costco and Macy’s.

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