The United States Department of Justice has settled a lawsuit that presented on monday with Activision Blizzard about suppressed esports salaries, according Reuters. The case, filed in the US District Court for the District of Columbia, centers on a rule that required independently owned teams to effectively pay double if they passed a soft salary cap. A federal judge will still have to approve the deal.
The complaint, the result of an investigation first reported in 2021, said that Activision’s Supervision and Obligations leagues, the “competitive balance tax” was structured to penalize teams if their compensation exceeded a threshold set by Activision. “While players in other professional sports leagues have agreed to salary restrictions as part of collective bargaining agreements, players in Activision’s esports leagues are not members of a union and have never negotiated these rules,” the DOJ clarified in a statement. the filling.
The case states that Activision would fine teams one dollar for every dollar in excess of the limit and redistribute the fees collected among all non-infringing teams. For example, the filing says that “if Activision were to set a competitive break-even tax threshold of $1 million, a team that spent $1.2 million in player compensation in one season would pay a $200,000 penalty, which would be distributed to the others.” equipment”.
Additionally, the Antitrust Division filed a proposed consent decree that would prohibit Activision from imposing further rules that would penalize a team for exceeding a fixed amount of compensation. It would also require the company 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 explanation of final judgment to the teams and players in their professional esports leagues.”
According to the DOJ, the Supervision and Obligations The leagues have generated millions of dollars. Microsoft is trying to overcome regulatory hurdles to move forward with its planned purchase of Activision Blizzard.
“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. “Today’s lawsuit makes clear that the Antitrust Division remains committed to protecting workers in all types of industries from anticompetitive conduct.”
