US Department Of Justice Investigates Activision Blizzard For Limiting Overwatch League Team Earnings
Activision Blizzard is once again in hot water following a year of layoffs and controversies surrounding the inflated salaries of its executives. The US Department of Justice’s antitrust division is currently investigating the company for allegedly putting limits on how much Overwatch League teams can earn in a given season.
According to Dot Esports, Activision Blizzard enforces a “secret soft cap” that required teams to pay the League an amount equal to any earnings over the limit, which in 2020 was $1.6 million. The money would then be divided among the other teams in the League. While this would be a good way to balance team spending within the League, it also limits the ability of team owners to offer more competitive salaries to their players.
Because Overwatch League teams aren’t unionized, the Department of Justice claims that the soft cap is a violation of the 1890 Sherman Antitrust Act that prohibits anticompetitive agreements and attempts to monopolize a certain market. Several former League employees have already been interviewed by DOJ officials and Activision Blizzard employees have been warned against tampering or destroying information related to player salaries.
“We have received an inquiry from the Department of Justice and are cooperating accordingly,” an Activision Blizzard spokesperson told Dot Esports. “We deliver epic entertainment to our fans and support our players and teams in producing the most competitive and enjoyable esports leagues in the world.”
The investigation coincides with the 2021 regular season, which is gearing up for the start of playoffs next month. The news also rekindled efforts to unionize eSports teams, a goal which several key persons in the industry have been working towards for the past few years.
