Activision Blizzard finds itself embroiled in legal contention as its management of the Call of Duty League becomes the focal point of a lawsuit initiated by two professional players. The plaintiffs assert that the esports league operates as an illegal monopoly, stifling competition and imposing what they deem to be “extortionate” financial conditions upon players and teams.
The litigants, prominent figures within the professional Call of Duty community, are Hector “H3CZ” Rodriguez, President of Optic Gaming, and Seth “Scump” Abner, renowned as the second most successful player in the game’s history. Together, they seek damages totaling $680 million from Activision Blizzard.
The lawsuit outlines Rodriguez’s experience, detailing how he was coerced into a financially burdensome partnership with billionaire investors to meet Activision’s requirements and secure one of the coveted 12 team slots in the Call of Duty League.
According to the recently filed lawsuit in federal court, before the inception of the Activision-owned Call of Duty League in 2019, competitive Call of Duty events were managed by various entities, including GameStop and Major League Gaming.
However, this landscape shifted significantly with Activision’s acquisition of Major League Gaming and the subsequent establishment of the Call of Duty League, effectively sidelining all other professional Call of Duty esports leagues and tournaments not under Activision’s control.
Allegations within the lawsuit contend that Activision has weaponized its monopoly over Call of Duty esports. While the league draws inspiration from traditional professional sports leagues like the NFL or NBA, there exists no collective bargaining agreement between team owners and players.
Unlike conventional sports leagues, Activision holds ownership of the game itself, affording them the authority to restrict players from earning revenue through external avenues disapproved by Activision.
Entrance into the league mandates a hefty $27.5 million fee from teams, alongside Activision claiming 50% of revenue derived from ticket sales, sponsorships, and other income streams.
Players are also prohibited from monetizing Call of Duty gameplay on platforms such as Twitch or YouTube and are compelled to relinquish potentially lucrative brand sponsorship opportunities to Activision. The lawsuit argues that players and teams were left with the choice of either accepting “draconian anti-competitive terms” skewed in Activision’s favor or exiting the market entirely.
The lawsuit further asserts that Activision’s pursuit and maintenance of monopoly power over the Call of Duty esports domain facilitated an exploitative revenue-sharing model, leaving players and teams to shoulder the financial risk while Activision reaped the lion’s share of profits.
Earlier this year, Activision Blizzard’s esports division underwent significant layoffs, casting uncertainty over the league’s future. The demise of Activision Blizzard’s Overwatch League, upon which the Call of Duty League was modeled, compounded the situation. The lawsuit deems these developments as exacerbating the harm inflicted, alleging that the company has effectively mismanaged the Call of Duty League.
Responding to inquiries from Bloomberg, an Activision Blizzard spokesperson dismissed the lawsuit as lacking factual and legal merit. The spokesperson vowed a vigorous defense against the allegations, expressing disappointment that the lawsuit would disrupt stakeholders invested in the Call of Duty League’s success.
It’s noteworthy that Activision Blizzard settled a civil antitrust lawsuit with the US Department of Justice the previous year, addressing concerns regarding antitrust violations in the Overwatch and Call of Duty Leagues. The company subsequently removed the “competitive balance tax,” which capped player salaries, from both leagues in 2021.
