Pro esports players Hector ‘H3cz’ Rodriguez and Seth ‘Scump’ Abner allege the company violated federal antitrust laws by coercing players and team owners to compete under ‘extortionate financial terms’ at the threat of exclusion from the Activision CoD league.
This may cause Microsoft a bit of buyers’ remorse! Activision Blizzard, which was acquired late last year for $70 billion, is being sued by pro esports players Hector “H3cz” Rodriguez and Seth “Scump” Abner over claims the game giant holds a monopoly over Call of Duty tournaments, which allows the company to violate federal antitrust laws and coerce players and team owners to comply to “extortionate financial terms.” They further claim that their ability to earn compensation from other sources, such as through endorsements and streaming, are restricted. The gaming duo seek at least $100 million in compensation as well as a court order prohibiting anticompetitive conduct.
According to the complaint, tournaments and leagues for the shooter were competitive and required only modest entry fees until 2019, when Activision began to demand players agree to “rent-seeking demands and various trade-restraining contractual provisions” that allegedly violate the Sherman Act. Abner claims he was coerced into signing one such contract “without adequate time to review, despite requesting counsel, and under threat of being excluded from the Activision CoD League absent immediate acquiescence to its terms.”
The suit further claims that all prospective teams must pay a $27.5 million entry fee to compete, forfeit over half their revenue from ticket sales and sponsorships, and cede exclusive rights to contract with sponsors. While other pro sports leagues may agree to salary restrictions due to union bargaining, esports players do not have a union and therefore can’t negotiate terms.
Activision’s 2016 acquisition of Major League Gaming Corporation, which also organized professional Call of Duty tournaments, could be seen as a monopolization effort. As the gaming giant also owns the copyright to the game, it has refused to grant licenses to third parties for further competitions.
“Thus, if a team of professional Call of Duty players wanted to continue to compete in professional Call of Duty leagues and tournaments - which is essential to the players’ and teams’ maintaining their ability to secure sponsorships and other ‘off-field’ revenue opportunities - their only choice was to do so in the Activision CoD League on terms dictated by Activision,” writes Eric Rosen, a lawyer for the plaintiffs, in the complaint.
In a statement, a spokesperson for Activision 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 filed.”
Cybersecurity specialist by day, investigative journalist by night.
