Game News US Files Lawsuit Against Activision Blizzard And It Has Nothing To Do With Microsoft
It’s not just the takeover by Microsoft that puts Activision Blizzard in the center of the legal spotlight. The box finds itself today at the heart of a new case which opposes it this time to the United States. We explain to you!
A history of money and esports
If I tell you esport and Competitive Balance Tax, you certainly don’t know what’s going on. To understand, it is important to look a little bit at player salaries. To give you an idea, we learned a few months ago the salaries of players in LFL, the French league of League of Legends. On the set of aperitif de Solary, Paul Arrivé, esports journalist, and Lounet, manager, indicated that a French player could receive between 1,200 and 12,000 euros per month. A wide range that varies according to the experience, performance and popularity of the player in question. Suffice to say that for some players, the bill can go up very high. And this is not necessarily to the taste of Activision Blizzard (Call of Duty, Overwatch).
This is where the Competitive Balance Tax comes into play. This is an agreement between Activision Blizzard and all teams competing in Overwatch and Call of Duty competitions. Its goal ? Freeze player salaries in order to “limit competition between teams in each league to obtain players”. Basically, each year Activision Blizzard set a limit that teams could not exceed, thus freezing player salaries:
For every dollar over the threshold, Activision would force teams to pay one dollar which would be redistributed on a pro rata basis to other teams in the league. For example, if the Competitive Balance Tax threshold was $1 million, a team that spent $1.2 million on player salaries in one season would be fined $200,000, which would be distributed to other teams.
Excerpt from the judgment of April 3
Underpaid gamers at Activision Blizzard?
While on paper this may seem fair enough, in reality it is a bit more complicated than that. The US Department of Justice fears that this rule will greatly penalize esports players, who will therefore be underpaid. As early as 2021, the government let Activision Blizzard know that an investigation was underway and that the Competitive Balance Tax may be illegal. On this date, the box therefore decided to lift this regulation. But that didn’t stop the country from taking Activision Blizzard to court. But that doesn’t necessarily mean that Activision Blizzard is in trouble.
If you follow the sport a bit, you know that there are already the same kind of regulations in the NBA or NFL in particular. According to the Department of Justice, the difference here is that this “tax” was not established following negotiations between player representatives and Activision Blizzard. But that did not prevent the two parties from reaching an agreement, which should be validated by the federal judge shortly. Activision Blizzard also reaffirmed its position: “We have always believed (and continue to believe) that the Competitive Balance Tax is legal and has had no negative effect on player salaries.”
