[US] Government sues Activision over Overwatch and CoD player salaries

The US Department Of Justice has filed a lawsuit against interactive entertainment and gaming corporation Activision Blizzard regarding its handling of salaries in Call Of Duty and Overwatch professional scenes, NME reports.

The US Government stated that Activision Blizzard’s Competitive Balance Tax in its Overwatch and Call Of Duty leagues limited competition and “suppressed esports players’ wages”, in its lawsuit.

The Competitive Balance Tax reportedly forced competing teams to adhere to a salary cap implemented by Activision, meaning teams were fined if any of their players were paid above a certain amount.

In October 2021, following an investigation by the DOJ, Activision Blizzard told Call Of Duty and Overwatch teams that the Competitive Balance Tax would no longer be enforced.

The DOJ alleged that “The Competitive Balance Tax substantially lessened competition between teams in the Overwatch and Call Of Duty Leagues for esports players and limited the players’ compensation,” and added that teams who used the majority of their salary cap on more expensive players drove down wages for everyone else.

If it is successful the lawsuit will lead to a financial penalty for Activision and order the company to avoid reimplementing anything like the Competitive Balance Tax again.

“Professional esports players – like all workers – deserve the benefits of competition for their services,” Jonathan Kanter - Assistant Attorney General of the Justice Department’s Antitrust Division - said. “Today’s lawsuit makes clear that the Antitrust Division remains committed to protecting workers across all types of industries from anticompetitive conduct.”

Activision denied the charges in a statement provided to GamesIndustry.biz.

“When we launched the Overwatch and Call Of Duty Leagues, we wanted to create viable career opportunities for the players requiring minimum salaries and mandatory benefits as part of player contracts,” a spokesperson for the company said.

“As a league, we also wanted our products to be competitive, so we carefully designed and implemented the Competitive Balance Tax.”

The statement continued, “We have always believed, and still believe, that the Competitive Balance Tax was lawful, and it did not have an adverse impact on player salaries. The tax was never levied, and the leagues voluntarily dropped it from our rules in 2021. 

“We remain committed to a player ecosystem with fair pay and healthcare and continue to have the least restrictive player mobility compensation system across all of the major sports leagues.”

Meanwhile, the state of California’s lawsuit against Activision Blizzard is ongoing and the company recently paid £28.9 million to settle charges from the United States Securities And Exchange Commission.

Source: NME

(Links and quotes via original reporting)

The US Department Of Justice has filed a lawsuit against interactive entertainment and gaming corporation Activision Blizzard regarding its handling of salaries in Call Of Duty and Overwatch professional scenes, NME reports.

The US Government stated that Activision Blizzard’s Competitive Balance Tax in its Overwatch and Call Of Duty leagues limited competition and “suppressed esports players’ wages”, in its lawsuit.

The Competitive Balance Tax reportedly forced competing teams to adhere to a salary cap implemented by Activision, meaning teams were fined if any of their players were paid above a certain amount.

In October 2021, following an investigation by the DOJ, Activision Blizzard told Call Of Duty and Overwatch teams that the Competitive Balance Tax would no longer be enforced.

The DOJ alleged that “The Competitive Balance Tax substantially lessened competition between teams in the Overwatch and Call Of Duty Leagues for esports players and limited the players’ compensation,” and added that teams who used the majority of their salary cap on more expensive players drove down wages for everyone else.

If it is successful the lawsuit will lead to a financial penalty for Activision and order the company to avoid reimplementing anything like the Competitive Balance Tax again.

“Professional esports players – like all workers – deserve the benefits of competition for their services,” Jonathan Kanter - Assistant Attorney General of the Justice Department’s Antitrust Division - said. “Today’s lawsuit makes clear that the Antitrust Division remains committed to protecting workers across all types of industries from anticompetitive conduct.”

Activision denied the charges in a statement provided to GamesIndustry.biz.

“When we launched the Overwatch and Call Of Duty Leagues, we wanted to create viable career opportunities for the players requiring minimum salaries and mandatory benefits as part of player contracts,” a spokesperson for the company said.

“As a league, we also wanted our products to be competitive, so we carefully designed and implemented the Competitive Balance Tax.”

The statement continued, “We have always believed, and still believe, that the Competitive Balance Tax was lawful, and it did not have an adverse impact on player salaries. The tax was never levied, and the leagues voluntarily dropped it from our rules in 2021. 

“We remain committed to a player ecosystem with fair pay and healthcare and continue to have the least restrictive player mobility compensation system across all of the major sports leagues.”

Meanwhile, the state of California’s lawsuit against Activision Blizzard is ongoing and the company recently paid £28.9 million to settle charges from the United States Securities And Exchange Commission.

Source: NME

(Links and quotes via original reporting)