Call of Duty creators sued over ‘IP-backed gaming monopoly’

Two individuals, including a gaming YouTuber, filed a complaint against the gaming giant accusing it of violating antitrust laws | Allegations of creating a “100% monopoly”, stifling competition, and restricting economic opportunities.

The creators of Call of Duty (CoD) have been hit with a lawsuit accusing them of using CoD IP to gain an “unlawful” market monopoly and force other market participants into unfavourable conditions.

Hector Rodriguez, CEO of OpTic Gaming, and Seth Abner, a Youtuber known as ‘The King of CoD’, filed a complaint against gaming giant Activision Blizzard, on February 15, 2024.

The lawsuit, filed in the US District Court for the Central District of California, alleged violations of antitrust laws, claiming Activision's complete monopoly over professional CoD leagues and tournaments.

The complaint concerned Activision's alleged unlawful “100% monopoly” over a previously “ lucrative and once-vibrant market”, and trade-restraining practices within the professional CoD esports market.

Until 2019, professional CoD was a “vibrant, competitive product market”, with multiple different professional leagues and tournaments that provided “lucrative prize pools and garnered substantial viewership”, said the complaint.

These leagues and tournaments were organised and conducted by different entities, including Activision, Major League Gaming—both now subsidiaries of Activision Blizzard—and GameStop.

The trio argued that Microsoft-owned Activision's actions have stifled competition, coerced players and team owners into accepting unfavourable financial terms, and ultimately restricted market access.

Activision’s acquisition of Major League Gaming

Rodriguez and Abner outlined a timeline of events, citing Activision's acquisition of Major League Gaming in 2016 as a key moment leading to market consolidation, and was made without the Federal Trade Commission’s approval.

This move was alleged to have resulted in the formation of a closed league, the Activision CoD League, similar to traditional sports leagues.

Activision CoD League did not come about from a collective bargaining agreement between team owners and players, instead it was “imposed” on them, according to the suit.

Players, including Abner, were “forced” to agree to “lengthy, Activision drafted official rules, terms and conditions of the CoD League”.

Activision's control over essential gaming rights and its strict contractual terms have pushed competitors to the side and denied players and teams of fair economic opportunities, according to the suit.

Activision's ownership of the copyright and trademark for CoD gave them control over the game itself, and allowed them to “swiftly monopolise the downstream professional CoD market”.

The suit argued Activision then cemented a complete monopoly over the professional CoD market by refusing to grant CoD licences to organisers and operators of other commercial CoD competitions.

If a team of professional CoD players wanted to continue to compete in professional CoD leagues and tournaments—which is essential to the players’ and teams’ maintaining their ability to secure sponsorships and other revenue opportunities—they had to do through the Activision CoD League on terms “dictated” by Activision.

Activision league a “colossal failure”

The complaint also highlights Activision's alleged retaliation against teams that disagreed and its recent downsizing of esports staff, signalling, according to the plaintiffs, the “colossal failure” of the Activision CoD League model.

The lawsuit highlighted the economic harm suffered by plaintiffs as a result of Activision's alleged monopolistic practices.

Rodriguez mentioned his difficulty of being forced into partnerships with billionaire investors under unfavourable terms, while Abner faced restrictions even after retiring from the league.

The complaint demanded a jury trial, seeking damages and an injunctive relief.

The representatives for Rodriguez and Abner are Eric Rosen, Constantine Economides, and Brianna Pierce from Dynamis, and Aaron Katz from Aaron Katz Law.

The representatives for Activision Blizzard have not been named.

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