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    Competitors Allege Activision Violates Antitrust Laws

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    Activision Blizzard is being sued because it is the only company that offers Call of Duty leagues and competitions.

    In a lawsuit filed Thursday, Feb. 15, in federal court in California, professional gamers Hector “H3cz” Rodriguez and Seth “Scamp” Abner argue that gaming giants “prevent competitors from entering the market. “This violates antitrust laws.” ” and forced players and team owners to agree to “exorbitant financial terms.”

    They call attention to mergers aimed at strengthening Activision's alleged monopoly power, as well as restrictions on its ability to accept payments from sources other than Activision through sponsorships and streaming.

    lawsuit

    The company said in a statement that the plaintiffs have demanded tens of millions of dollars from Activision to avoid this pointless lawsuit. If their demands were not met, they filed suit.

    However, the lawsuit alleges that until 2019, competition existed in the market for Call of Duty leagues and tournaments, with multiple entities including Activision, GameStop, and Major League Gaming hosting events. The lawsuit alleges that entry fees were often low, allowing only the best players and teams to participate.

    Players allege that the title's creator, Activision, has begun requiring top players and teams to agree to “rent demands and various anti-trade clauses” that allegedly violate the Sherman Act. This antitrust law prohibits illegal restrictions on trade. Abner said that despite hiring a lawyer, he was forced to sign a contract during the photo shoot without being given sufficient time to review it, and if he did not immediately agree to the terms, he would be removed from the Activision CoD League. He said he was threatened with being removed.

    The heart of the lawsuit

    In the lawsuit, the team states that Activision will receive half of ticket sales and sponsorship revenue, pay a $27.5 million entry fee to participate in the tournament, and all exclusive agreements with its largest sponsors, including broadcasters. requested that he waive his rights. Monster Beverage, Mountain Dew, USAA Insurance, and sponsors.

    Activision's league was designed with traditional sports leagues such as the National Basketball Association in mind, according to the complaint. In contrast to other leagues, the company did not have collective bargaining agreements with players or team owners.

    Has the Call of Duty League created a monopoly?

    According to the complaint, there are no restrictions preventing prospective contestants from participating in Call of Duty esports events, and the competitive scene in Activision's best-selling military shooter was completely closed prior to the formation and launch of the Call of Duty League in 2020. It is said that it was open to people.

    With low barriers to entry and the flexibility to participate in ancillary economic activities with few restrictions, players, organizations, and investors are free to participate in the Call of Duty eSports ecosystem. During this period, team owners were free to move or sell assets under their control and pay players what they considered fair market value.

    According to Rodriguez and Abner, Major League Gaming (MLG) is the largest third-party event organizer in the competitive CoD ecosystem. obtained It was developed by Activision in 2016 and has had a huge impact on the competitive environment of CoD. At the time, Activision Blizzard said its goal with the acquisition was to become the “ESPN of esports.” In the end, this dream was only partially achieved. CoD contests were organized by outside organizations such as ESL, GameStop, and MLG before CDL was held.

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