Activision Blizzard is being sued by the United States Department of Justice (DOJ) for their Overwatch and Call of Duty leagues.
Blizzard is facing legal problems as they are being sued by the US Justice Department for a “Competitive Balance Tax”. This tax is made to avoid wealthier eSports teams from overpaying their talents for Blizzard’s leagues in Overwatch and Call of Duty. Should this be violated, teams would have to pay a fine that will be split among non-infringing teams.
According to the DOJ, teams owned independently have a tax that “effectively operated as a salary cap, penalized teams for paying esports players above a certain threshold and limited player compensation in these leagues.” In response, Activision has stated that these salary limit plans were voluntarily dropped by the leagues in 2021 and the tax was never imposed.
A degree was proposed by the DOJ that says that Activision Blizzard is not permitted to engage in related anti-competitive conducts going forward. This is coming at a sensitive time as Activision are being processed to be acquired by Microsoft.
