Justice Dept. Sues Activision Blizzard, Seeks to End Esports Player Salary Cap


The US Department of Justice (DOJ) has filed a civil antitrust lawsuit against Activision Blizzard, Inc., considered one of the biggest video game developers and publishers on this planet. The suit accuses the corporate of implementing rules that limited competition for players in its Overwatch and Call of Duty skilled esports leagues, leading to the suppression of player wages in violation of the Sherman Act.

Assistant Attorney General Jonathan Kanter of the DOJ’s Antitrust Division said, “Video games and esports are amongst the most well-liked and fastest growing types of entertainment on this planet today, and skilled esports players—like all employees—deserve the advantages of competition for his or her services. Activision’s conduct prevented that from happening.”

The grievance, filed within the U.S. District Court for the District of Columbia, alleges that Activision, together with independently-owned teams in each league, instituted a so-called Competitive Balance Tax. Based on the grievance, the tax was designed to penalize teams within the Overwatch and Call of Duty leagues if a team’s player compensation exceeded a threshold set by Activision.

To deal with these competition concerns, the Antitrust Division filed a proposed consent decree alongside the lawsuit. If approved by the court, the decree would prohibit Activision from imposing any rule that directly or not directly limits player compensation in any of its skilled esports leagues or that might tax, fantastic, or otherwise penalize any team for exceeding a certain amount of compensation for its players.

Moreover, the proposed consent decree would require Activision to certify that it has terminated all Competitive Balance Taxes in its skilled esports leagues, implement revised antitrust compliance and whistleblower protection policies, and supply notice and a proof of the ultimate judgment to groups and players in its skilled esports leagues.

The proposed consent decree and competitive impact statement might be published within the Federal Register, as mandated by the Tunney Act. A 60-day comment period will follow, during which any person may submit written comments to the Chief of the Civil Conduct Task Force on the Antitrust Division of the DOJ. Following the comment period, the U.S. District Court for the District of Columbia may enter the ultimate judgment if deemed in the general public interest.

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