Activision Blizzard has been in some hot water over the past year. It began with allegations of workplace discrimination and sexual harassment allegations. More recently, the US Justice Department has sued Activision Blizzard for “suppressing esports wages.”
US Justice Department Cracks Down On Activision Blizzard
The US Justice Department filed a lawsuit against Activision Blizzard over alleged antitrust allegations related to Call of Duty and Overwatch Leagues, which are major esports competitions organized and owned by Activision Blizzard.
The complaint accuses the gaming giant of imposing anti-competitive contract terms on players that restrict their ability to negotiate with other teams and organizations, ultimately limiting their potential earnings.
Jonathan Kanter, the assistant attorney general of the Justice Department’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 accuses Activision and its esports teams of implementing a “competitive balance tax” that penalizes teams if player compensation exceeds a threshold set by the game maker. It was filed in the US District Court for the District of Columbia.
In response to these accusations, Activision’s part of the statement to VGC includes, “We have always believed, and still believe, that the Competitive Balance Tax was lawful, and it didn’t have an adverse impact on player salaries. The tax was never levied, and the leagues voluntarily dropped it from our rules in 2021.”
The antitrust division filed a proposed consent decree that would forbid Activision from limiting player compensation or penalizing teams for paying players above a certain wage, pending court approval.
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