Activision Blizzard faces legal problems over alleged monopolistic tactics

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Gaming giant Activision Blizzard finds itself entangled in a legal battle as it is hit with a lawsuit alleging anti-competitive practices, particularly concerning its flagship franchise “Call of Duty.”

As reported by The Economic Times, professional gamers Hector Rodriguez and Seth Abner have taken legal action against Activision, claiming that the company is unlawfully monopolizing the lucrative market for Call of Duty leagues and tournaments. 

Filed in Los Angeles federal court, the antitrust lawsuit highlights Activision’s alleged restrictive tactics, which, according to the plaintiffs, hinder competition and stifle opportunities for other organizers in the gaming community. 

Call of Duty, a cornerstone of the gaming industry since its inception in 2003, has been a major revenue driver for Activision, contributing significantly to its annual earnings. However, the lawsuit contends that Activision’s dominance has led to unfair practices that undermine the competitive landscape of the game.

Activision has responded to the allegations, asserting its intention to vigorously defend against what it describes as baseless claims. The company disproves the accusations and highlights its refusal to comply with the plaintiffs’ pre-lawsuit financial demands. Notably, Microsoft’s acquisition of Activision last year for $69 billion adds another layer of complexity to the situation, with the deal currently under scrutiny by the U.S. Federal Trade Commission.

The lawsuit also references Activision’s acquisition of Major League Gaming in 2016, which the accuser argues consolidated the company’s control over Call of Duty competitions. According to the lawsuit, Activision’s subsequent actions, including the implementation of stringent contractual terms, have significantly marginalized competing teams and players in the professional Call of Duty market. This legal action follows Activision’s previous settlement with the U.S. Justice Department regarding allegations of wage suppression in professional esports leagues. While Activision agreed to refrain from imposing salary caps, it did not admit any wrongdoing in the matter.

The case raises important questions about competition within the gaming industry and the extent to which major companies like Activision Blizzard may wield influence over the esports landscape. The lawsuit, titled Hector Rodriguez, Seth Abner and HECZ LLC v. Activision Blizzard Inc, is currently before the U.S. District Court, Central District of California.