Activision Blizzard settles DOJ case over salary caps in some of its esports

Activision Blizzard settles DOJ case over salary caps in some of its esports

5. April 2023 by miranda angeles

The U.S. Department of Justice charged Activision Blizzard with violating antitrust rules concerning salary caps for professional players in the CDL and OWL.

In November last year, news broke that settlement negotiations between Activision Blizzard and the DOJ had failed over antitrust violations. After this news was released by Jacob Wolf, the Activision team has been preparing against the salaries of CDL and OWL professional gamers.

According to various reports, the lawsuit reached a turning point on April 3. At that time, the DOJ filed suit and settled with Activision for violating antitrust laws in the developer’s various professional leagues.

Competitive balance tax

According to the U.S. authorities, Activision Blizzard was implementing illegal measures to keep players’ salaries low. The developer imposed penalties on teams that spent more on player compensation than the already established cap to achieve this. The rule the developer was breaking is known as the “Competitive Balance Tax.”

The Attorney General of the antitrust division handling this case, Jonathan Kanter, has stated that all professional gamers and any workers in different industries deserve to receive fair compensation for their services.

The U.S. Antitrust Division has issued a consent decree preventing the developer from enforcing any restrictions that would limit the income of professional Call of Duty and Overwatch players.

Wage Limits by Activision Blizzard

Following the lawsuit filed by the DOJ, Activision Blizzard refutes claims that the compensation arrangements for players in its various leagues violate any laws.

A spokesperson for the developer has stated, and he assures that the competitive legal tax is completely legal. Furthermore, the spokesperson reaffirms that they continue to maintain that position.

On the other hand, he assures that in 2021 the tax was eliminated from its esports regulations and that it was never applied while in force.

The spokesperson affirms that the company has always been on the players’ side; moreover, they are always looking to provide them with reasonable medical assistance. He goes on to say that in the regulations, they still have the mobility compensation scheme, which is currently the least restrictive of all esports leagues.

Even though all the spokespersons said for the development, they have come under heavy criticism. Not just for what is happening now; but for engaging in hiring discrimination, union busting and limiting workers’ rights.

We are talking about the DOJ being the fourth government entity to take action on actions taken at Activision Blizzard.