Antitrust Law Daily Wrap Up, ANTITRUST—NDCal: Justice Department Provides Sufficient Responses to Interrogatories in Challenge to Bazaarvoice/PowerReviews Combination, (Apr 24, 2013)

By Jeffrey May, J.D.

In a Department of Justice action challenging Bazaarvoice Inc.'s consummated acquisition of PowerReviews Inc. on the ground that the transaction substantially lessened competition in the market for product ratings and reviews platforms (PRR platforms) in the United States, the Justice Department was not ordered to supplement responses to three of Bazaarvoice's interrogatories. The federal district court in San Francisco denied Bazaarvoice's motion that the United States supplement its responses (U.S. v. Bazaarvoice Inc., April 22, 2013, Beeler, L.).

In January, the Justice Department filed a civil antitrust complaint, challenging Bazaarvoice's June 2012 acquisition of PowerReviews—its purported lower-priced competitor. The government, contending that the $168.2 million transaction would result in higher prices and diminished innovation, sought an order requiring Bazaarvoice to divest assets to create the viable competitor lost as a result of the acquisition.

The case is in its early stages, but is on a faster track than normal. A trial is set for September 10, 2013.

Bazaarvoice questioned the sufficiency of the government's responses with respect to the following three interrogatories:

(1) "IDENTIFY ANY ENTITIES that YOU contend PROVIDE or have the capacity to PROVIDE the ‘PRR platforms’ referenced in the COMPLAINT";

(2) "IDENTIFY ANY ENTITIES that YOU contend have been or will be harmed by the alleged anti-competitive effects of the TRANSACTION referenced at Paragraph 62 of the COMPLAINT"; and

(3) "For each ENTITY IDENTIFIED in response to [the prior] Interrogatory, DESCRIBE the reasons that each ENTITY has or will experience the alleged anti-competitive effects."

In response to the first question, the government offered the firms identified by Bazaarvoice during the investigation. Bazaarvoice contended that it needed to know what the United States believed were the other PRR platform providers, not what Bazaarvoice identified during the investigation. The government has since agreed to supplement its responses as it develops new information.

With respect to the other two questions, the government responded that all of Bazaarvoice’s and PowerReviews’ current or prospective customers (online retailers and brands that sell products through the retailers) are the entities that "may be harmed by the loss of head-to-head competition between Bazaarvoice and PowerReviews" and that current or future customers may be harmed by the loss of competition.

According to Bazaarvoice, in the absence of anticompetitive effects, the government should be required to support its contentions. In the court's view, Bazaarvoice wants the government to provide more detailed responses to its "contention interrogatories." However, at this early stage of the litigation, Bazaarvoice is unable to meet its burden to compel responses, the court decided. Contention interrogatories asked before discovery is undertaken are generally disfavored. In any event, the Justice Department has since provided a list of 140 customers the government contacted and has agreed to segregate out of that list the interviewees who would not amount to a harmed entity within the scope of the interrogatory. The government claimed that it "was not sandbagging Bazaarvoice and that there was nothing more to provide at this time" with respect to the final disputed interrogatory.

The court concluded that ordering the government to provide further responses was unnecessary in light of the government's "willingness to amend as discovery provides more context."

This case is Civ. C 13 0133.

Attorneys: Melinda Haag for United States. Scott Andrew Sher (Wilson Sonsini Goodrich & Rosati) for Bazaarvoice, Inc.

Companies: Bazaarvoice, Inc.

Cases: Antitrust AntitrustDivisionNews CaliforniaNews