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

doj sues activision blizzard over esports player compensation

The United States Department of Justice (DOJ) has filed a civil antitrust lawsuit against Activision Blizzard, Inc., one of the largest video game developers and publishers in the world. The suit accuses the company of implementing rules that limited competition for players in its Overwatch and Call of Duty professional esports leagues, resulting in 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 among the most popular and fastest growing forms of entertainment in the world today, and professional esports players—like all workers—deserve the benefits of competition for their services. Activision’s conduct prevented that from happening.”

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

To address 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 indirectly limits player compensation in any of its professional esports leagues or that would tax, fine, or otherwise penalize any team for exceeding a specific amount of compensation for its players.

Furthermore, the proposed consent decree would require Activision to certify that it has terminated all Competitive Balance Taxes in its professional esports leagues, implement revised antitrust compliance and whistleblower protection policies, and provide notice and an explanation of the final judgment to teams and players in its professional esports leagues.

The proposed consent decree and competitive impact statement will be published in 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 at the Antitrust Division of the DOJ. Following the comment period, the U.S. District Court for the District of Columbia may enter the final judgment if deemed in the public interest.

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Joshua Sophy Joshua Sophy is the Editor for Small Business Trends and has been a member of the team for 16 years. A professional journalist with 20 years of experience in traditional media and online media, he attended Waynesburg University and is a member of the Society of Professional Journalists. He has held roles of reporter, editor and publisher, having founded his own local newspaper, the Pottsville Free Press.