Activision is being sued by the CEO of OpTic Gaming Hector ‘H3CZ’ Rodriguez and Seth ‘Scump’ Abner for its monopoly in the esports market for around $680 million in a lawsuit as reported by Bloomberg Law. According to the allegations, Activision has an ‘unlawful’ monopoly over the esports leagues which it used to place unjust restrictions on teams.
As per the lawsuit, the major chunk of revenue earned by the biggest professional esports players is from social media, sponsorships and endorsements which was inhibited after Activision’s takeover in 2019 as players were not able to earn from other entities. Before Activision took over, different organisations held different Call of Duty tournaments which was not possible since late 2019.
Activision Monopoly Challenged by Lawsuit
Major teams were forced to exit the esports market due to Activision’s terms. The lawsuit explains how Rodriguez was directly affected by the new terms by stopping him from being the sole owner of a Call of Duty team and essentially forcing his subsequent partnership with Envy. The lawsuit alleges that “Activision’s conduct forced Rodriguez to give to the billionaire investors’ company Envy Gaming, Inc. a 92.5% ownership share in OpTic.” Rodriguez was forced into a ‘financially devastating’ partnership due to Activision wanting him to partner with investors that met Activision’s approval. The lawsuit also states that “one Activision executive told Rodriguez that he was not the type of owner Activision wanted for the league”.
The claims made in the lawsuit are very serious and if held, then could create further problems for Activision and Microsoft who are already facing scrutiny from FTC since their merger.
Call of Duty League Exclusivity with YouTube
Aside from these claims, the lawsuit also talks about Activision’s streaming exclusivity deal with YouTube which directly impacted creators like Seth Abner (Scump) who hosted watch along parties for the Call of Duty Leagues on Twitch, with major success as his streams received more views than the official one. After Activision’s switch to YouTube, Scump simultaneously cast on both YouTube and Twitch without showing any gameplay on the latter, however, his YouTube channel still received a copyright strike from Activision which forced the stream to be taken down. Fans have already been disappointed with Activision’s handling of the Call of Duty Leagues and acts like these further damage the community’s trust in the company.
These events fueled the lawsuit by Hector Rodriguez and Seth Abner who are now seeking over $680 million in damages.
Activision Blizzard spokesperson stated, “Mr. Rodriguez (aka OpTic H3CZ) and Mr. Abner (aka Scump) demanded that Activision pay them tens of millions of dollars to avoid this meritless litigation, and when their demands were not met, they filed, we will strongly defend against these claims, which have no basis in fact or in law. We are disappointed that these members of the esports community would bring this suit which is disruptive to team owners, players, fans, and partners who have invested so much time and energy into the Call of Duty League’s success.”
It is also important to note that esports tournaments have previously faced similar restrictions however people are hoping that this lawsuit sets a precedent for the opposite. You can find the full lawsuit here. Meanwhile, you can check out one of our Call of Duty Modern Warfare 3 guides.
