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Justice Department Sues Activision Over Esports Leagues

Activision Blizzard’s ‘Overwatch’ league holding a match in San Antonio.


Sergio Flores/Bloomberg News

The U.S. Justice Department on Monday said it filed an antitrust lawsuit against

Activision Blizzard Inc.

ATVI -0.39%

alleging that the company imposed rules that limited competition for players in two of its videogame franchises’ professional esports league and suppressed wages for players in those leagues.

The department said its complaint alleges that in two of the esports leagues owned by the videogame company, Activision and the independently-owned teams in each league implemented a so-called Competitive Balance Tax. The tax was structured to penalize teams in the “Overwatch” and “Call of Duty” leagues if a team’s player compensation exceeded a threshold set by Activision, the complaint alleges.

The Justice Department’s antitrust division said it filed a proposed consent decree that, if approved, would prohibit Activision from imposing any rule that would limit player compensation in any of its professional esports leagues or that would tax, fine or otherwise penalize any team for exceeding a certain amount of compensation for its players, among other measures.

“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 department’s antitrust division.

Activision said, “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.”

The complaint was filed Monday in the U.S. District Court for the District of Columbia.

Write to Denny Jacob at [email protected]

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