Activision Blizzard Call of Duty Monopoly Lawsuit Seeks at Least $680M

Microsoft subsidiary, the gaming firm, dubs the legal action ‘groundless’

Claims demanding a collective sum of no less than $680 million as compensation are being brought against Activision Blizzard, a division of Microsoft, by two professional esports players. The company is accused of sustaining an “illegal total monopoly” of professional leagues and tournaments for the first-person shooting game, “Call of Duty.”

Activision Blizzard, as stated in the litigation, has used its unlawfully acquired monopoly power to suppress potential competitors from infiltrating the market. It has allegedly forced other market participants, most notably professional ‘Call of Duty’ players and team owners, to comply with exorbitant financial terms.

Hector Rodriguez (alias “H3CZ” in “Call of Duty”) who established the OpTic Gaming team, and Seth Abner, known as “Scump” in the gaming world, are the two esports gamers suing Activision. The suit labels other teams in the CDL as “co-conspirators” in sustaining Activision’s supposed monopoly, with no teams named as plaintiffs. The plaintiffs have retained the right to include some or all entities or individuals who conspired with the defendant in the alleged offenses.

An Activision Blizzard representative stated that Rodriguez and Abner demanded tens of millions of dollars from Activision to avoid this baseless suit. They filed the suit when their demands weren’t met. The representative affirmed that the company would staunchly defend against these claims, which they believe lack factual or legal grounds. The firm expresses disappointment that members of the esports community chose to bring this disruptive lawsuit.

Rodriguez and Abner’s suit asserts that until 2019, the Call of Duty esports professional realm was a thriving, competitive product with multiple leagues and tournaments hosted by entities including Activision, GameStop, and Major League Gaming. Activision eliminated its largest competitive threat by purchasing Major League Gaming for a reported $46 million in 2016, without securing FTC’s approval, the lawsuit alleges.

Activision announced formation of the Call of Duty League in 2019. It’s a “closed league”, capped at 12 permanent teams, modeled after conventional sports leagues. Teams were compelled to pay Activision a $27.5 million “entry fee” and hand over an uncapped 50% revenue share from ticket sales, sponsorships, and other streams. The agreement also forced teams to forego participation or support for any other professional Call of Duty leagues or tournaments, the lawsuit noted.

The lawsuit claims these trade-restraining contractual provisions undeservedly enriched Activision at the expense of professional Call of Duty players and teams.

The suit was filed on Feb. 15 in the U.S. District Court for the Central District of California Western Division in Los Angeles. A copy of the lawsuit is available via the hyperlink.

The lawsuit noted that last year, the Department of Justice sued Activision Blizzard for violating the Sherman Act by imposing rules that limited player competition in Activision’s Overwatch and Call of Duty professional esports leagues while also suppressing players’ wages.

Microsoft completed its massive $69 billion acquisition of Activision Blizzard in October 2023, marking the biggest-ever merger and acquisition transaction in the gaming industry. As part of integrating Activision Blizzard with its operations, Microsoft Gaming announced last month that it will lay off 1,900 employees from its workforce of 22,000.

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