The U.S. Department of Justice is looking into the Overwatch League’s soft salary cap policy that punishes teams who pay players too much, according to a new report by Dot Esports.
The investigation is being headed up by the Civil Conduct Task Force, part of the department’s antitrust division. According to Dot Esports, regulators are looking into whether the Overwatch League’s secret soft cap on salaries violates the 1890 Sherman Antitrust Act because the players aren’t unionized. While the investigation isn’t criminal, Dot Esports reports that “several former Overwatch League employees” have already been interviewed by Justice Department officials and that current Activision Blizzard employees have been instructed by the company to not “tamper with or destroy information regarding player salaries.”
The Justice Department and Activision Blizzard did not immediately respond to a request for comment by Kotaku.
“We have received an inquiry from the Department of Justice and are cooperating accordingly,” a spokesperson for Activision Blizzard told Dot Esports. “We deliver epic entertainment to our fans and support our players and teams in producing the most competitive and enjoyable esports leagues in the world.”
A “competitive balance tax” in the Overwatch League was first reported by Dexerto in 2019, but has never been publicly acknowledged by Activision Blizzard. According to Dot Esports, the soft salary cap per team in 2020 was $1.6 million. For every dollar franchises like the San Francisco Shock, Shanghai Dragons, and London Spitfire paid over that amount, they had to pay an equal additional amount to the league to be redistributed back to the other teams. While in theory this would help keep the league balanced in terms of team spending, it would also discourage teams from offering more competitive salaries to players.
News of the Justice Department’s investigation comes in the middle of the Overwatch League’s 2021 regular season, with playoffs set to begin next month. Most of the matches have been played offline due to the ongoing pandemic. Teams are currently competing in qualifiers for the mid-season Summer Showdown tournament.
The news has already kickstarted a new debate over unionization in epsorts, something pro Overwatch players might want to reconsider ahead of the next transfer window.
Update - 5:29 p.m. ET, 7/12/21: The Department of Justice declined to comment on Dot Esports’ original report, but in response to a FOIA request by Kotaku confirmed the existence of “ongoing enforcement proceedings” related to the Overwatch League.