US Justice Department sues Activision Blizzard over antitrust violations in esports league player salaries
The US Justice Department sued Activision Blizzard for supposedly breaking antitrust laws regarding the salary caps for OWL and CDL players. The case was eventually settled.
Since Jacob Wolf claimed that settlement negotiations between the DOJ and Activision had collapsed due to antitrust violations in November 2022, Activision Blizzard has been preparing legal action regarding OWL and CDL player salaries for some time. According to numerous reports, on April 3, 2023, the DOJ sued Activision Blizzard and settled with them regarding antitrust violations in their esports leagues, which brought the situation to a climax.
According to the US government, Activision Blizzard penalized teams that spent more on player salaries than a cap set by the video game creator in order to keep the pay of esports players down. The Competitive Balance Tax was the name given to this regulation.
According to Jonathan Kanter, an assistant attorney general with the Justice Department’s antitrust division, “video games and esports are among the most well-liked and rapidly expanding forms of entertainment in the world today, and professional esports players—like all workers—deserve the benefits of competition for their services.” A consent order that the DOJ also filed would prevent the developer from enforcing any additional restrictions on OWL and CDL player pay.
Activision Blizzard disputes an attempt to set a wage cap for OWL and CDL players
Activision Blizzard has refuted accusations that the salary agreements for all its esports leagues, halted in 2021, was illegal.
“We have always held the opinion that the Competitive Balance Tax was legal and had no adverse effects on player wages. We still hold this opinion today. The leagues willingly removed the tax from our rules in 2021 because it was never imposed. The least restrictive player mobility compensation system across all major sports organizations, is something we continue to be dedicated to, an Activision Blizzard representative told GamesIndustry.
Activision Blizzard has come under fire for breaking unions, engaging in employment discrimination, and limiting workers’ rights; the DOJ is the fourth government agency to take action against the business. Due to this settlement and lawsuit, it has been claimed that OWL teams have slowed down their league promotion for its first event in 2023.