Call of Duty’ gamers sue Activision over league and tournament monopolization
February 16, 2024 – 7:55 AM PST
(Reuters) – Video game maker Activision Blizzard has been hit with a U.S. lawsuit claiming it restricts competition for organized gaming involving its flagship franchise “Call of Duty.”
Professional gamers Hector Rodriguez and Seth Abner said in an antitrust lawsuit filed in Los Angeles federal court on Thursday that Activision is unlawfully monopolizing the lucrative market for Call of Duty leagues and tournaments.
Call of Duty, a first-person-shooter game first introduced in 2003, is one of the industry’s all-time best sellers and helped propel Activision to billions of dollars in annual revenue, the lawsuit said.
Activision said in a statement that it will “strongly defend against these claims, which have no basis in fact or in law.” Activision said it refused a pre-lawsuit demand from the plaintiffs for “tens of millions of dollars.”
Microsoft (MSFT.O) acquired Activision last year for $69 billion, in a deal that still faces U.S. Federal Trade Commission scrutiny.
Activision in 2016 paid $46 million to buy Major League Gaming, which the lawsuit called the leading Call of Duty competition organizer.
League and tournament play for Call of Duty was a “vibrant, competitive product market” until 2019, when Activision moved to open its own league and eliminate competition, the lawsuit said.
Activision then imposed “draconian” contract provisions on teams and players, according to the lawsuit.
“Teams that did not (or could not) accede to Activision’s extortionate demands were cut out of the professional Call of Duty market entirely,” the lawsuit said. Rodriguez’s company HECZ LLC is also a plaintiff.
Last year, Activision settled a lawsuit by the U.S. Justice Department accusing the company of suppressing gamers’ wages in professional esports leagues.
Activision agreed to refrain from placing any caps on salaries. It did not admit any wrongdoing.
The case is Hector Rodriguez, Seth Abner and HECZ LLC v. Activision Blizzard Inc, U.S. District Court, Central District of California, No. 2:24-cv-01287.
Reporting by Mike Scarcella Editing by David Bario
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How has Activision Blizzard responded to the lawsuit and what defense strategy are they employing to combat these allegations?
> Title: Activision Blizzard Faces Legal Challenges Over Monopolistic Practices in Competitive Gaming
> Date: February 16, 2024
> Introduction
In recent legal proceedings, popular video game maker Activision Blizzard is currently facing a lawsuit in the United States. The lawsuit alleges that the company is engaging in monopolistic practices that restrict competition in the organized gaming sector, particularly in relation to their flagship franchise, “Call of Duty.” This article will delve into the details of the lawsuit and the implications it may have for the gaming industry.
> Lawsuit Allegations
The lawsuit, filed by professional gamers Hector Rodriguez and Seth Abner in the Los Angeles federal court, accuses Activision Blizzard of unlawfully monopolizing the Call of Duty leagues and tournaments, thereby limiting competition. Call of Duty, a highly popular first-person shooter game introduced in 2003, has been instrumental in Activision’s success, generating billions of dollars in annual revenue for the company.
> Activision’s Response
Activision Blizzard has strongly denied these claims, stating that they have no basis in fact or law. The company further revealed that it refused a pre-lawsuit demand from the plaintiffs for “tens of millions of dollars.” It remains to be seen how Activision will defend itself against these allegations.
> Microsoft’s Acquisition and Major League Gaming
Last year, Microsoft acquired Activision Blizzard for a staggering $69 billion, a deal that is still under U.S. Federal Trade Commission scrutiny. In 2016, Activision purchased Major League Gaming for $46 million, which was recognized as the leading organizer of Call of Duty competitions. The lawsuit argues that until 2019, the league and tournament scene for Call of Duty was a thriving and competitive market.
> Activision’s Alleged Monopolistic Practices
According to the lawsuit, Activision changed the dynamics of the market by creating its own league and eliminating competition. It is claimed that Activision imposed onerous contract provisions on teams and players, which the lawsuit refers to as “draconian.” Teams that did not comply with Activision’s alleged extortionate demands were allegedly excluded from the professional Call of Duty market. One of the plaintiffs, Hector Rodriguez, owns HECZ LLC, which is also involved in the lawsuit.
> Previous Legal Troubles
Notably, Activision Blizzard settled a lawsuit last year filed by the U.S. Justice Department, which accused the company of suppressing wages for professional esports athletes. As part of the settlement, Activision agreed to refrain from imposing any caps on salaries, although no admission of wrongdoing was made.
> Conclusion
The lawsuit brought against Activision Blizzard by Hector Rodriguez, Seth Abner, and HECZ LLC has shed light on alleged monopolistic practices and the restriction of competition in the competitive gaming arena, specifically within the Call of Duty franchise. As the case proceeds in the U.S. District Court, it will be interesting to see how the court interprets the evidence provided and whether Activision Blizzard’s practices are deemed anticompetitive. The outcome of this lawsuit could have significant implications for the gaming industry as a whole.
> - Reporting by Mike Scarcella
> – Edited by David Bario
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