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