For Bazaarvoice, Inc. — a software company founded by 1999 Wharton MBA graduate Brett Hurt — the fallout from a federal antitrust lawsuit continues.
On Wednesday, the Department of Justice filed a proposal for final judgment in its lawsuit against Bazaarvoice, which, pending court approval, will require the company to sell all assets gained from its 2012 acquisition of PowerReviews, Inc.
Bazaarvoice and PowerReviews are businesses that provide internet retailers with ratings and reviews platforms — software systems that allow users to offer feedback about the products available online.
The DOJ’s proposal is a follow-up action to the ruling that Judge William Orrick of the U.S. District Court of Northern California handed down in the lawsuit last month.
In the decision, Orrick declared that since PowerReviews was Bazaarvoice’s “closest and only serious competitor,” Bazaarvoice’s acquisition of the San Francisco-based company violated a federal antitrust law.
The specific law at issue, Section 7 of the Clayton Act, prohibits business transactions that create monopolies or significantly reduce competition within a particular industry.
“Bazaarvoice’s unlawful acquisition of PowerReviews has deprived customers of the benefits of competition for 20 months,” Assistant Attorney General Bill Baer , who leads the DOJ’s antitrust division, said in a press release.
With its proposed remedy, the DOJ aims to “restore the competitive landscape” that would have currently existed in the ratings and reviews industry had PowerReviews “not been illegally acquired by Bazaarvoice,” Baer added.
The DOJ has also made certain provisions for the potential asset sale process. Among the stipulations is a plan for the possibility that PowerReviews’ value could have diminished “so significantly that the asset sale would not transfer a large number of customers to the divestiture buyer.”
The DOJ also seeks that the court “appoint a special master to oversee the divestiture process and monitor Bazaarvoice’s compliance with its other obligations.”
Though the DOJ filed a motion for final judgment along with the remedy proposal, it is unlikely that the lawsuit will end this month, given the timeline of Bazaarvoice’s next steps.
Matt Krebsbach , a spokesperson for Bazaarvoice, said in a statement that the company “will respond to the DOJ’s position in [its] own brief, which will be filed with the Court by March 5.”
He added that Bazaarvoice continues to “provide the Court and DOJ with other materials and information” that it “believe[s] [are] relevant to the determination of an appropriate remedy that achieves the best possible outcome for [its] clients and shareholders.”
