Activision Blizzard has settled a case brought against them by the US Justice Department over salary caps for esports players.
Activision Blizzard has abandoned plans to cap salaries for esports players as a result of recent legal proceedings.
The US Department of Justice recently brought a case against Activision Blizzard for its “anti-competitive” salary caps present in Overwatch 2 and Call of Duty esports leagues. The complaint (opens in new tab) details several points summarizing how the Competitive Balance Tax was unfair to players.
Activision introduced this tax to prevent the wealthiest teams from snatching the best players with financial incentives. However, it soon backfired on teams and players alike. This tax saw wages for all players deflate on average. Since teams would be fined if they spent over the budget, many ended up paying more for a single player, cutting wages for the rest of the team.
“Teams also understood that the Tax incentivized their competitors to limit player compensation in the same way”, the Department of Justice said in its complaint.
