Activision Blizzard settled a lawsuit with the U.S. Department of Justice over allegations that the publisher imposed a limit on esports players’ salaries paid by the Overwatch and Call of Duty leagues.
The department filed the complaint in the U.S. District Court in Washington, D.C. on Monday, saying that Activision Blizzard, which owns the Overwatch League and the Call of Duty League, and the independently owned teams agreed to impose the Competitive Balance Tax. As its name suggests, the tax was designed to limit competition between the teams by suppressing the wages of esports players and fined teams for paying players above a certain threshold set by Activision Blizzard, which the department said violated the Sherman Act.
The DOJ added that Activision Blizzard dropped its salary limit rules in October 2021 following its investigation into the Competitive Balance Tax.
“The tax was never levied, and the leagues voluntarily dropped it from our rules in 2021,” Activision said in a statement (per Reuters). “We have always believed, and still believe, that the Competitive Balance Tax was lawful, and it did not have an adverse impact on players.”
The complaint said that the tax affected every esports player since the inception of each league — the Overwatch League started in 2018, while the Call of Duty League began in 2020 — especially players with larger salaries. This is because, unlike other professional esports players who agreed to salary restrictions through the collective bargaining process, players in the Overwatch and Call of Duty leagues were not part of a union nor did they negotiate wage rules.
Per the settlement, Activision Blizzard agreed not to impose any salary limits on the esports players in its leagues nor fine the teams for paying high salaries to certain players. However, the settlement still needs to be approved by a federal judge for it to take effect.
The settlement is the latest in a series of legal issues facing Activision Blizzard. The National Labor Relations Board (NLRB) filed a complaint against the publisher last Friday over allegations of illegal surveillance of employees and other labor law violations, including threatening to shut down communication channels.
Cristina Alexander is a freelance writer for IGN. She has contributed her work to various publications, including Digital Trends, TheGamer, Twinfinite, Mega Visions, and The Escapist. To paraphrase Calvin Harris, she wears her love for Sonic the Hedgehog on her sleeve like a big deal. Follow her on Twitter @SonicPrincess15.
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