The U.S. Department of Justice on April 3 filed a civil antitrust lawsuit against Activision Blizzard, Inc., one of the world’s largest video game developers and publishers, for rules it asserted limited competition for players in Overwatch and Call of Duty professional esports leagues and suppressed wages of esports players in violation of the Sherman Act.
“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,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division in a press release. “Today’s lawsuit makes clear that the Antitrust Division remains committed to protecting workers across all types of industries from anticompetitive conduct.”
The complaint, filed in the U.S. District Court for the District of Columbia, alleges that in two esports leagues owned by Activision, Activision and the independently-owned teams in each league implemented a Competitive Balance Tax. As alleged in the complaint, the tax penalized teams in the Overwatch and Call of Duty Leagues if a team’s player compensation exceeded a threshold set by Activision.
According to the press release, the antitrust division also filed a proposed consent decree to address its competition concerns. If approved by the court, the proposed consent decree would prohibit Activision from imposing any rule that would limit player compensation in any of Activision’s professional esports leagues or that would tax, fine or otherwise penalize any team for exceeding a certain amount of compensation for its players.
The DOJ noted the proposed consent decree would also require Activision to certify it’s ended all Competitive Balance Taxes in its professional esports leagues, to implement revised antitrust compliance and whistleblower protection policies and to provide notice and an explanation of the final judgment to teams and players in its professional esports leagues.
As required by the Tunney Act, the proposed consent decree, along with the competitive impact statement, will be published in the Federal Register, according to the press release.
Anyone may submit written comments concerning the proposed consent decree during a 60-day comment period mailed to the following address: Chief, Civil Conduct Task Force, Antitrust Division, Department of Justice, 450 Fifth St. NW, Suite 8600, Washington, D.C. 20530.
At the end of the comment period, the court may enter the final judgment if it finds that’s in the public interest.