The DOJ recently announced that it filed a complaint objecting to Bazaarvoice, Inc.'s $168.2 million acquisition of PowerReviews, Inc. The acquisition was not reported under the Hart-Scott-Rodino Act, which would have given the DOJ an opportunity to review the acquisition before it closed. The DOJ filed its complaint nearly six months after the acquisition was finalized.

Bazaarvoice and PowerReviews host product ratings and review (PRR) platforms, which are used by retailers and manufacturers to collect and display customer ratings and reviews of products online. The reviews are used by:

The DOJ cited Bazaarvoice as the largest PRR supplier in the market, with PowerReviews as its closest and virtually only competitor. Of the top 500 internet retailers, 350 use a PRR platform, 70% of which are hosted by Bazaarvoice or PowerReviews. Bazaarvoice acknowledged PowerReviews as its biggest rival and discussed the benefits of its acquisition in internal e-mails stating that the acquisition would result in increased market share and price stabilization.

The DOJ is alleging the acquisition substantially lessened competition by:

The DOJ is also alleging that because Bazaarvoice and PowerReviews often based their quoted price to prospective customers on what they believed the other was charging, the acquisition cost consumers essential negotiation power.

The DOJ is requesting that Bazaarvoice be required to divest sufficient assets to create a separate and distinct business to replace the competition lost by the PowerReviews acquisition.

This is the DOJ's first consummated merger challenge brought under the leadership of Bill Baer, Assistant Attorney General in charge of the DOJ's Antitrust Division, serving as a sign that the DOJ intends to continue its aggressive merger enforcement. This case also serves as a good example of how bad documents created internally by transacting parties can result in a merger investigation and lawsuit.