As previously reported, the U.S. Department of Justice recently won a significant victory thwarting Bazaarvoice’s already-consummated merger with rival PowerReviews, Inc., when U.S. District Court Judge William Orrick (N.D. Cal.) ruled that the merger limited competition in violation of federal antitrust law. The DOJ is now reportedly touting that victory as a lesson that software-related acquisitions are subject to the same antitrust principles applied to those of a brick-and-mortar industry.
In January 2013, the DOJ challenged Bazaarvoice’s $168 million merger with PowerReviews, arguing that the merger was intended to eliminate pricing pressure from Bazaarvoice’s largest rival and that it was intended to create a dominant player capable of hiking prices in the product ratings platform industry. The court, finding that the merger eliminated Bazaarvoice’s only meaningful competitor, ordered that the DOJ is entitled to an order requiring that the merger be unwound but recognized that unwinding the merger after 18 months poses challenges. The parties continue to negotiate an appropriate order.