The U.S. Justice Department filed a civil antitrust lawsuit against Activision Blizzard, Inc., one of the world's largest video game developers and publishers, for imposing rules that limited competition for players in its Overwatch and Call of Duty professional esports leagues. The company allegedly violated the Sherman Act by suppressing the wages of esports players in these leagues.
Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division stated that "professional esports players—like all workers—deserve the benefits of competition for their services" and that "Activision’s conduct prevented that from happening." The lawsuit aims to demonstrate the Antitrust Division's commitment to protecting workers across various industries from anticompetitive conduct.
The complaint, filed in the U.S. District Court for the District of Columbia, alleges that Activision and the independently-owned teams in each league implemented a so-called Competitive Balance Tax. This tax allegedly penalized teams in the Overwatch and Call of Duty Leagues if a team's player compensation exceeded a threshold set by Activision.
The Antitrust Division also filed a proposed consent decree to address competition concerns. If approved by the Court, the decree would prohibit Activision from imposing any rule that would directly or indirectly limit player compensation in any of its professional esports leagues, or tax, fine, or penalize any team for exceeding a certain amount of compensation for its players.
The proposed consent decree would also require Activision to certify that it has ended all Competitive Balance Taxes in its professional esports leagues, implement revised antitrust compliance and whistleblower protection policies, and provide notice and an explanation of the final judgment to teams and players in its professional esports leagues.
Following the Tunney Act, the proposed consent decree and competitive impact statement will be published in the Federal Register, with a 60-day comment period open for public submissions. After the comment period, the U.S. District Court for the District of Columbia may enter the final judgment if it is deemed in the public interest.
This lawsuit reflects the Antitrust Division's broader focus on anticompetitive labor market abuses. The Division encourages anyone with information about anticompetitive conduct against workers or other antitrust law violations to contact the Antitrust Division's Citizen Complaint Center.
