Activision Blizzard Settles DOJ Lawsuit Over Esports Salary Cap Controversy

In a dramatic turn of events, Activision Blizzard has agreed to settle a lawsuit brought forth by the US Department of Justice (DOJ) over allegations of anti-competitive practices in its Call of Duty and Overwatch esports leagues. The publisher faced accusations of imposing a soft salary cap for players, known as the Competitive Balance Tax.

The Competitive Balance Tax was designed to prevent wealthier teams from monopolizing top talent with high salaries. However, the DOJ alleges that this policy ultimately deflated wages for all players across the board. Under the tax, teams exceeding Activision Blizzard's imposed salary limit faced fines, with fees distributed among non-offending teams.

In response to the lawsuit, Activision Blizzard has consented to a decree that prohibits the imposition of any future tax or salary cap. The publisher had already discontinued the tax in 2021 amid a DOJ investigation.

Joe Christinat, a spokesperson for Activision Blizzard, told The Verge that the company maintains its belief in the legality of the Competitive Balance Tax and denies any adverse impact on player salaries. He stated, "The tax was never levied, and the leagues voluntarily dropped it from our rules in 2021."

Settlement talks between Activision Blizzard and the DOJ had reportedly collapsed in 2022. However, the recent agreement suggests that the publisher aims to avoid complications in its impending acquisition by Microsoft, which already faces its own allegations of anti-competitive behavior.