Call of Duty publisher Activision Blizzard has settled a lawsuit filed by the US Justice Department over the company’s proposed taxation of esports player salaries.
Both Call of Duty and Overwatch esports teams were set to receive an effective wage cap called the Competitive Balance Tax that was supposed to kick in once both teams earn a certain threshold.
“Video games and esports are among the most popular and fastest growing forms of entertainment in the world today, and professional esports players — like all workers — deserve the benefits of competition for their services,” said Assistant Attorney General Jonathan Kanter, head of the Justice Department’s antitrust division as reported by Bloomberg.
The video game publishers also said that it had dropped its plans for this tax since 2021 with no intention to put it into action.
“We have always believed, and still believe, that the Competitive Balance Tax was lawful, and it did not have an adverse impact on player salaries,” Activision said in a statement.
No future tax laws will be imposed
“We remain committed to a player ecosystem with fair pay and healthcare and continue to have the least restrictive player mobility compensation system across all of the major sports leagues,” said Activision Blizzard spokesperson Joe Christinat.
The press release from the DOJ also outlines the conditions of the settlement’s consent decree, which would prevent Activision Blizzard from implementing any form of tax or salary cap in the future.
Despite settling the matter and freeing itself from this lawsuit, Activision is still being monitored by US lawmakers over its impending $68.7 billion acquisition deal by Windows company Microsoft.
Isa Muhammad is a writer and video game journalist covering many aspects of entertainment media including the film industry. He's steadily writing his way to the sharp end of journalism and enjoys staying informed. If he's not reading, playing video games or catching up on his favourite TV series, then he's probably writing about them.
