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A federal court has struck down the deal on antitrust grounds, and a hearing next week could shed light on what comes next.
A federal court will consider next week whether Bazaarvoice Inc. will be permitted to retain ownership of rival online ratings and review provider PowerReviews Inc., following a ruling that the deal violated antitrust laws.
Bazaarvoice bought PowerReviews in 2012 for $168.2 million, but last week the U.S. District Court in the Northern District of California struck down the deal on antitrust grounds. Ruling in favor of the U.S. Department of Justice, Judge William H. Orrick III said the deal would enable Bazaarvoice to dominate the market for ratings and reviews.
Orrick scheduled a hearing for Tuesday to start remedy proceedings. He said that splitting the companies “is not a simple proposition” so long after the deal. Bazaarvoice says it will wait until the remedy phase concludes before deciding whether to appeal.
“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,” says Gene Austin, president of Bazaarvoice. “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.”
Bazaarvoice has more than 800 product ratings and reviews clients in the United States, including about 350 former PowerReviews clients, the Justice Department said in court papers.
Bazaarvoice has 280 clients listed among the Internet Retailer 2013 Top 500 Guide. Among some 40 other similar providers listed in the guide, the vendor with the next highest total is BizRate, with eight. Pluck and several others each have two. Ninety-eight retailers in the Top 500 note that they built their own customer ratings and reviews systems.