The antitrust division of the U.S. Department of Justice is investigating the Overwatch League over its soft wage cap policy, according to a report by Dot Sports.
"In 2020, the soft wage cap threshold was $ 1.6 million, according to league sources. If a team exceeds that amount in annual player salaries, the organization would have to pay the players' salaries, as well as the excess amount in the league as a luxury tax, "his report says.
Because this luxury tax discourages other organizations from offering competitive salaries, it could be a violation of antitrust. Activision Blizzard has not publicly acknowledged this policy, although Dexerto first reported it in 2019, referring to note referring to a "competitive balance tax" and now tweets deleted by Susie Kim, who at the time was the general manager of London Spitfire, which referred to the "(soft) salary cap".
"We have received a consultation from the Department of Justice and we are cooperating accordingly," an Activision Blizzard representative told Dot Sports. "We offer epic entertainment to our fans and support our players and teams in producing the most competitive and enjoyable sports leagues in the world."
Many sports leagues such as the NFL and NBA have "non-statutory labor exemptions," as the Sherman Act of 1890, an important antitrust law, does not apply to union-employer agreements. However, Overwatch League players are not currently unionized.
We have contacted Activision Blizzard and the Overwatch League to comment and we will update this story with any response.