US government sues Activision Blizzard over ‘Call Of Duty’ and ‘Overwatch’ player salaries
The US Department Of Justice has filed a lawsuit against Activision Blizzard regarding its handling of salaries in Call Of Duty and Overwatch professional scenes.
In the lawsuit, 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”.
The Competitive Balance Tax forced competing teams to adhere to a salary cap implemented by Activision, meaning they were fined if any of their players were paid above a certain amount.
In October 2021, Activision Blizzard told Call Of Duty and Overwatch teams that the Competitive Balance Tax would no longer be enforced, following an investigation by the DOJ.
“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,” alleged the DOJ, who added that teams who used most of their salary cap on more expensive players drove down wages for everyone else.
If successful, the lawsuit would hit Activision with a financial penalty 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,” said Jonathan Kanter, Assistant Attorney General of the Justice Department’s Antitrust Division. “Today’s lawsuit makes clear that the Antitrust Division remains committed to protecting workers across all types of industries from anticompetitive conduct.”
In a statement provided to GamesIndustry.biz, Activision denied the charges.
“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,” said a spokesperson for the company.
“As a league, we also wanted our products to be competitive, so we carefully designed and implemented the Competitive Balance Tax.”
They 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.”
Elsewhere, the state of California’s lawsuit against Activision Blizzard continues, while the company recently paid £28.9million to settle charges from the United States Securities And Exchange Commission.
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Andy Brown
NME
