Written by Isaac Chew
Antitrust laws are designed to promote competition by restricting the ability of one single company from dominating the market. Ensuring mergers and acquisitions do not overconcentrate market power or form monopolies, also breaking up those that have formed monopolies. It also prevents multiple firms from colluding or forming a cartel to limit competition through practices such as price fixing.
The rise of Esports brings up several antitrust concerns, especially since Microsoft and Sony dominate much of the video game industry. Unlike traditional sports, Esports games are entirely owned by video game publishers like Riot Games, Valve, and Activision Blizzard. This gives them full control over how their games are played in competitive settings, essentially creating legal monopolies. While this is allowed under intellectual property (‘IP’) law, it raises questions about fairness and competition. For example, publishers can limit or even ban third-party tournaments, which is something you wouldn’t see in traditional sports leagues like the NFL.
Legal Monopolies in Esports
When we think of monopolies, we usually imagine competitive monopolies where one company dominates an entire industry. But the kind of monopoly power held by video game publishers is different. These are limited legal monopolies granted under intellectual property law, and they do not typically fall under the kind of monopoly antitrust law targets.
Antitrust law aims to protect market competition and encourage ongoing innovation by preventing dominance that shuts out new competitors. IP law, on the other hand, promotes innovation by granting creators temporary, limited control over their work in exchange for public disclosure. So, while IP law allows narrow, legally protected monopolies, antitrust law steps in when that control grows too broad and harms competition.
Since the legal monopolies held by video game publishers do not fall under antitrust law, there is no oversight addressing the monopoly-like issues they create. These challenges have largely been accepted as part of how the Esports industry works, leaving few options for those seeking change. While there have been small victories, like cases around equal pay and discrimination, the broader power imbalance remains unaddressed.
Anti-Trust Cases
In 2024, OpTic Gaming president Hector ‘H3CZ’ Rodriguez and star player Seth ‘Scump’ Abner sued Activision Blizzard for $680 million. They claim Rodriguez was pushed into a financially damaging deal with billionaire investors just to meet Activision’s strict requirements and secure one of the limited 12 spots in the Call of Duty League. They argue that Activision’s control over the Call of Duty League amounts to an illegal monopoly. According to the lawsuit, Activision forced teams to pay a $27.5 million entry fee and take only 50% of the revenue from ticket sales and sponsorships. Players were also heavily restricted in how they could earn money outside the league, limiting their ability to monetise their gameplay on their terms. The lawsuit claims Activision deliberately took control of the market to claim a huge share of the revenue, while leaving only scraps and all the financial risk for the players and teams who drive the league’s success.
As of 26 May 2025, the US Federal Trade Commission (‘FTC’) officially ended its legal challenge against Microsoft’s $69 billion acquisition of Activision Blizzard. The FTC initially filed the lawsuit in December 2022, raising concerns that the merger could harm competition in the gaming industry, particularly in console, subscription, and cloud gaming markets. However, after a series of legal defeats, including a key appeals court ruling on 7 May 2025, the FTC concluded that continuing the case was not in the public interest.
Controversy sparked when gaming giant Valve, the company behind the Steam gaming platform, was hit with another antitrust lawsuit last year. The lawsuit, filed in federal court in Seattle by four individuals, alleges Steam has built its market dominance off the back of anticompetitive practices. The lawsuit centred on Valve’s ‘platform most-favored nations’ clause, which purportedly prevents game publishers from offering lower prices or exclusive content on rival platforms. Additionally, Valve’s standard 30% commission on game sales was criticised for contributing to higher consumer prices.
In November 2024, US District Judge certified the lawsuit as a class action, expanding its scope to include approximately 32,000 game developers who sold games on Steam since 2017. Till now, Valve has not publicly commented on the lawsuit. The outcome could have significant implications for digital game distribution and pricing practices in the industry.
Regulatory Actions
The FTC and Department of Justice (‘DOJ’) are responsible for making sure that antitrust laws are abided by. It was implemented to prevent companies from getting greedy and abusing their power.
In 2023, Activision Blizzard faced regulatory action from the DOJ for using a ‘competitive balance tax’ in its Overwatch and Call of Duty leagues. This system penalised teams that paid players above a set compensation threshold, effectively capping salaries and, according to the DOJ, limiting competition and suppressing wages. To resolve the issue, Activision agreed to a settlement that bars the company from enforcing such policies.
The EU’s Digital Market Act, which came into force in 2023, is built upon European case law and experience in digital markets, targeting gatekeeper platforms with obligations to ensure fairness and contestability. Since enforcement began, it has already led to changes in how major players like Google and Apple operate.
Similarly, the UK’s Digital Markets, Competition and Consumer Act 2024 (‘DMCC’) takes a more collaborative approach, allowing regulators to work with platforms to set tailored conduct rules and pro-competition measures. While not specific to esports, the DMA’s provisions against unfair trading practices and requirements for interoperability could impact major game publishers and platforms involved in esports.
Conclusion
In conclusion, the significant control that game publishers hold through intellectual property rights has created monopoly-like situations in esports, ones that traditional antitrust laws aren’t fully equipped to handle. As esports continues to grow around the world, especially in places like Malaysia, there is a real need for clearer, more balanced rules to make sure everyone in the industry has a fair shot.
Published on 25 June 2025