Activision Blizzard Faces Lawsuit Over Monopolizing Call of Duty Leagues and Tournaments

A screen showing the game ‘Call of Duty’ displays

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Activision Blizzard Faces Monopoly Lawsuit Over Call of Duty Leagues

Activision Blizzard esports division is being accused of monopolizing the market for Call of Duty leagues and tournaments, according to a lawsuit filed on Thursday. Professional gamers Hector “H3cz” Rodriguez and Seth “Scump” Abner allege that the gaming giant violates antitrust laws by preventing competition and coercing players and team owners into unfavorable financial terms. The lawsuit claims that Activision has imposed restraints on player compensation, restricted revenue sources, and engaged in mergers to secure its alleged monopoly power. The plaintiffs seek at least $100 million in damages and an injunction to prohibit further anticompetitive conduct.

Suppression of Competition and Exploitation of Players

The lawsuit argues that the market for Call of Duty leagues and tournaments was competitive until 2019, with various entities hosting events. However, the plaintiffs allege that Activision began imposing restrictive demands, trade-restraining provisions, and rent-seeking behavior, which the lawsuit claims violates the Sherman Antitrust Act. The lawsuit states that players and teams were coerced into signing contracts without adequate time for review and were threatened with exclusion from the Activision CoD League. These contracts include substantial entry fees, the surrendering of revenue from sales and sponsorship deals, and the exclusive control of the most lucrative sponsorships and broadcasters by Activision.

Legal Issues and Previous Conflict

The lawsuit highlights several legal issues with Activision’s practices, including the acquisition of Major League Gaming Corporation, which the plaintiffs believe consolidated its control over professional Call of Duty tournaments. Additionally, the lawsuit points out that Activision’s ownership of the game copyright enables the company to deny licenses to other competition organizers and operators. The absence of a collective bargaining agreement with players and team owners is also raised as a concern, as negotiations in other professional sports leagues often result in agreements that restrict player salaries and rights. Activision settled a lawsuit with the Department of Justice in 2021 over allegations of imposing rules that limited competition for players and suppressed wages in its esports leagues.

Activision’s Response

A spokesperson for Activision stated that the plaintiffs demanded significant financial settlements before pursuing litigation. The company intends to fight the lawsuit, counterarguing that the accusations are baseless and that the players are seeking unwarranted compensation. Activision’s recent acquisition by Microsoft is also noted, as the merger strengthens its position in the gaming industry. Activision’s esports leagues, modeled after traditional sports leagues, continue to draw attention, and the outcome of this lawsuit may impact the future landscape of competitive gaming.

Note: This article and the featured image are for illustrative purposes only and not directly related to the lawsuit.