## Facts

- Bazaarvoice, Inc. and PowerReviews, Inc. sold hosted “ratings and reviews” (R&R) platforms that enable retailers and manufacturers to collect, organize, and display consumer ratings and reviews on their websites.
- The companies sold primarily to large enterprise customers using negotiated, multi-year contracts.
- In June 2012, Bazaarvoice acquired PowerReviews in a transaction not reportable under the Hart-Scott-Rodino thresholds and then integrated the businesses.
- Internal Bazaarvoice documents before the deal described PowerReviews as its “only real commercial competitor” and portrayed the acquisition as a means to eliminate price competition and increase pricing power.
- The United States (DOJ Antitrust Division) sued on January 10, 2013, seeking to unwind the completed merger under § 7 of the Clayton Act.

## Issues

1. What relevant product and geographic markets should be used to evaluate competitive effects of the acquisition?
2. Whether the acquisition may substantially lessen competition in the relevant market in violation of Clayton Act § 7.
3. Whether claimed entry, repositioning by other firms, or efficiencies rebutted the government’s prima facie case.

## Decision

- The court held the relevant product market was R&R platforms sold to retailers and manufacturers, and the relevant geographic market was the United States.
- The court found the acquisition violated § 7 because it likely substantially lessened competition in the U.S. market for enterprise R&R platforms.
- The government established a prima facie case through high market concentration and shares, reinforced by direct evidence from internal documents and testimony indicating the merger would remove close competition and increase pricing power.
- Bazaarvoice did not rebut the prima facie case; the court rejected arguments that other vendors, in-house solutions, or potential entrants would constrain post-merger market power.
- The court found asserted efficiencies were not shown to be merger-specific or sufficiently verifiable to offset likely competitive harm.
- The court entered judgment for the United States on liability and set subsequent proceedings to determine an appropriate remedy.

## Legal Principles

- Clayton Act § 7 prohibits acquisitions where the effect “may be substantially to lessen competition,” requiring a forward-looking assessment of likely competitive effects.
- A merger producing high market shares and increased concentration can create a presumption of illegality; defendants may rebut by showing the presumption is inaccurate or outweighed by countervailing factors.
- Relevant market definition turns on reasonable interchangeability and competitive constraints; broader “industry” labels do not control if customers treat a narrower product category as distinct.
- Entry defeats a § 7 claim only if it is timely, likely, and sufficient to deter or counteract market power.
- Efficiencies are not credited to rebut a prima facie case unless they are cognizable (including merger-specific and verifiable) and sufficient to offset the likely anticompetitive effects.
- Although subjective intent is not an element of § 7 liability, contemporaneous internal documents can be probative as direct evidence of competitive dynamics and expected effects.

## Conclusion

The court held that Bazaarvoice’s consummated acquisition of PowerReviews unlawfully reduced competition in a properly defined U.S. market for enterprise ratings-and-reviews platforms, relying on structural concentration evidence and unusually strong internal-document proof that the merger eliminated the principal competitive constraint and increased market power.


United States v. Bazaarvoice, Inc., 13 F. Supp. 3d 970 (N.D. Cal. 2014)