Activision Under Legal Scrutiny – The DOJ Fight Against ESports Leagues 🕹

Activision Under Legal Scrutiny – The DOJ Fight Against ESports Leagues

After the trials and tribulations from Microsoft’s acquisition of Activision Blizzard, new reports show the U.S. Department of Justice has filed a lawsuit against Activision related to a new topic: eSports. Dating back 45 years ago, eSports began as a new form of entertaining competition, conducted solely in a virtual setting on a video game. In the world, eSports now generates roughly $900 million a year in sponsorship and advertising, with the entire market expected to grow to around $6 billion by the end of the decade. With younger generations’ appetite for video games exponentially growing, eSports now has a viewer base that exceeds that of all American professional sports except the NFL. Now, how did Activision Blizzard become involved in competitive eSports leagues? 

With the parent company’s myriad of games under its belt, each popular competitive game holds its own eSports league which is owned and operated by Activision. The two leagues under legal question involve Call of Duty and Overwatch, both of which are owned by Activision Blizzard and are arguably two of the most popular first-person shooters at this time. The DOJ believes that the videogame company pursued restrictions that both limited competition and players’ salaries, violating federal antitrust laws. The restriction in question is the so-called “Competitive Balance Tax”, which is a tax that was set on teams if their player’s salaries exceeded a certain limit set by Activision Blizzard. Although physical professional sports teams also contain salary caps, these are not set directly by the league, but, are collectively bargained between the league and its player unions. In this case, Activision was the sole proprietor that enacted these restrictions and penalties, and could very well be subject to the complaints just filed this Monday.

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