Activision settles with Justice Department due to “anti-competitive” behaviour

techradar.com:

Activision Blizzard has abandoned plans to cap salaries for esports players as a result of recent legal proceedings. 

The US Department of Justice recently brought a case against Activision Blizzard for its “anti-competitive” salary caps present in Overwatch 2 and Call of Duty esports leagues. The complaint(opens in new tab) details several points summarizing how the Competitive Balance Tax was unfair to players. 

Activision introduced this tax to prevent the wealthiest teams from snatching the best players with financial incentives. However, it soon backfired on teams and players alike. This tax saw wages for all players deflate on average. Since teams would be fined if they spent over the budget, many ended up paying more for a single player, cutting wages for the rest of the team. 

“Teams also understood that the Tax incentivized their competitors to limit player compensation in the same way”, the Department of Justice said in its complaint. “Further exacerbating the Tax’s anticompetitive effects”. 

However, Activision Blizzard had already scrapped the Competitive Tax Balance for Overwatch 2 and Call of Duty esports teams. DoT Esports(opens in new tab) reported that Activision had ended the practice towards the end of 2021 in response to the Department of Justice first opening up this investigation, potentially as a preventative measure.

Despite ending the practice, Blizzard stuck to its guns in a statement provided to The Verge(opens in new tab). “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”, a spokesperson for Activision Blizzard, Joe Christinat, said.

Blizzard has officially agreed to the settlement proposed by the