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A screen appears showing the game ‘Call of Duty’
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Activision Blizzard faces a lawsuit that accuses it of monopolizing the video market Obligations leagues and tournaments.
Professional players Hector “H3cz” Rodriguez and Seth “Scump” Abner, in a lawsuit filed Thursday in federal court in California, allege that the gaming giant violates antitrust laws by preventing “potential competitors from entering the market” and coercing to the players and the team. owners to accept “exorbitant financial conditions.” They point to restrictions on their ability to obtain compensation from sources other than Activision through sponsorships or streaming, as well as mergers intended to consolidate the company’s alleged monopoly power.
In a statement, a company spokesperson said the plaintiffs “demanded that Activision pay them tens of millions of dollars to avoid this meritless litigation, and when their demands were not met, they sued.”
According to the complaint, the market Obligations Leagues and tournaments were competitive until 2019, with multiple entities, including Activision, GameStop, and Major League Gaming, hosting events. They mostly had modest entry fees, ensuring that the best players and teams could participate, the lawsuit says.
But that year, players say, Activision, which created the title, began requiring top players and teams to agree to “rent-seeking lawsuits and various contract provisions that restrain trade” that allegedly violate the Sherman Act, a law antitrust which, among other things, prohibits illegal restraints on trade. Abner says he was forced to sign a contract during a photo shoot “without adequate time to review it, despite having sought advice, and under threat of being banned from the Activision CoD League if he did not immediately accept the terms of the agreement.” he”.
According to the lawsuit, teams must pay a $27.5 million entry fee to compete in the tournaments, give Activision half of their revenue from ticket sales and sponsorships, and give the gaming giant the exclusive right to hire the most lucrative sponsors, like Monster Beverage. Mountain Dew and USAA Insurance, and broadcasters.
Activision’s league was modeled after traditional sports leagues, such as the National Basketball Association, the lawsuit says. But unlike those leagues, the company did not have a collective bargaining agreement with players and team owners.
While players in other professional sports leagues have agreed to salary restrictions as a result of negotiations, esports players are not members of a union and have never negotiated the rules. According to legal experts, there are exemptions in antitrust laws for agreements that restrict players’ salaries and rights if they are reached through the collective bargaining process.
The lawsuit also challenges Activision’s 2016 acquisition of Major League Gaming Corporation, which was the primary organizer of professional Call of Duty tournaments at the time. That purchase was not subject to pre-merger notification requirements or oversight by the Federal Trade Commission.
And because Activision owns the copyright to the game, it refused to grant licenses to organizers and operators of other competitions, players claim.
“Therefore, if a team of professional Call of Duty players would like to continue competing in professional Call of Duty leagues and tournaments, which is essential for players and teams to maintain their ability to secure sponsorships and other income” out of the field” opportunities: their only option was to do so in the Activision CoD League under the terms dictated by Activision,” Eric Rosen, an attorney for the plaintiffs, writes in the complaint.
Players file lawsuits alleging unfair competition and violations of various antitrust laws. They are asking for at least $100 million and a court order prohibiting future anti-competitive conduct.
Activision did not immediately respond to a request for comment. In October, Microsoft closed a $69 billion deal to buy the company after defeating a lawsuit from the Federal Trade Commission. The merger is believed to further cement the company’s position as a gaming giant.
Last year, Activision settled a lawsuit filed by the Department of Justice that accused the company of imposing rules that illegally hindered player competition in two of its esports leagues and depressed salaries. The agency cited a complaint about the so-called competitive balance tax at Activision. Obligations and Supervision suspenders. The rule, which the leagues’ independently owned teams must follow, imposes a tax on teams if their players’ total salaries exceed a certain threshold.
Under an agreement, Activision was prohibited from setting any rules that would in any way restrict player salaries or penalize a team for exceeding the player salary cap.