The United States Justice Department has filed, and settled, an antitrust lawsuit against Activision Blizzard for allegedly violating antitrust laws around salary caps for OWL and CDL players.
Activision Blizzard has had legal action brewing around OWL and CDL player salaries for some time, as Jacob Wolf reported in November 2022 that settlement talks between the DOJ and Activision had broken down over antitrust violations.
The situation has come to a head on April 3, 2023, as the DOJ sued and settled with Activision Blizzard over antitrust violations in its esports leagues, according to multiple reports.
New: The DOJ sued Activision Blizzard over what it called "salary caps" for esports players in the Overwatch and Call of Duty leagues. Activision Blizzard agreed to a settlement. pic.twitter.com/sab6PcXavI
— Cecilia D'Anastasio (@cecianasta) April 3, 2023
The US government says that the video game developer has illegally implemented rules to keep esports players’ salaries down by penalizing teams that spent more on player salaries than an amount decided on by Activision Blizzard. This rule was called the Competitive Balance Tax.
“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,” Jonathan Kanter, a Justice Department antitrust division assistant attorney general said.
The DOJ also filed a consent decree that would stop the developer from imposing any other rules limiting OWL and CDL player pay.
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Activision Blizzard denies efforts to limit CDL and OWL player salary
Activision Blizzard has denied that its salary agreements across its esports leagues, which were suspended in 2021, were in violation of the legal statutes.
“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,” an Activision Blizzard representative told GamesIndustry.biz.
The DOJ is just the fourth governmental body to take action against Activision Blizzard as the company has come under fire for union-busting, employment discrimination, and restricting workers’ rights.
OWL teams have reportedly slowed down on promoting the league due to this settlement and lawsuit for its first event of 2023.