Activision to settle with DOJ regarding Esports wages

Activision Blizzard Inc. is being sued by the U.S. Justice Department for antitrust violations. As a result of its policies, the company restricted competition and suppressed wages for professional esports players in two of its videogame franchises.

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According to the statement made by the department, Activision and the independent teams in each of the two esports leagues owned by the company implemented a tax known as the Competitive Balance Tax in two of those leagues. It is alleged that the tax was designed so that teams in the Overwatch and Call of Duty leagues would be penalized if their player compensation exceeded a threshold set by Activision, according to the complaints.

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Prior to the proposed settlement becoming finalized, there will be an opportunity for public comment and a review of it by the court.

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In a proposal filed by the Justice Department's antitrust division on Monday, Activision is prohibited from imposing any regulation that would limit the compensation of players in any of their professional esports leagues. In addition, if the proposed consent decree is approved, Activision will not be permitted to impose any rules that would restrict player compensation, or that would tax, fine, or otherwise penalize teams for exceeding a certain amount of compensation to their players.

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"The benefits of competition should be provided to professional esports players, just as they should be provided to all workers. This could not have happened if Activision's conduct had not been prevented," stated Assistant Attorney General Jonathan Kanter, head of the department's antitrust division.

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As Activision stated, "We have always believed that there was no harm done to player salaries by the Competitive Balance Tax, and we continue to believe that it is legal, and does not have any adverse effects on this. This tax was never imposed, and the leagues voluntarily dropped it from our rules in 2021 as a result of no longer being levied.”

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It was filed Monday in the U.S. District Court for the District of Columbia in an action which was initiated by the plaintiff.