Written by Richard Wee, Low May Ping and Wong Zi Ying
Esports has been rapidly growing in recent years and this has attracted many investors to enter into this industry. Due to the unorthodox and novel settings of esports, there are bound to be disputes. This article will discuss some recent legal disputes involving esports such as contract disputes, anti-competitive law, e-doping and cheating.
This case started in May 2019 and was a contract dispute concerning sponsorship opportunities and payment. Initially, the streamer, Turner Tenney alleged that FaZe prevented him from signing sponsorship deals and 80% of his revenue earned from third parties was allowed to be collected by the organisation.
FaZe Clan denied such allegations and filed a countersuit against Turner Tenney. The company claimed that Turner Tenney had breached his contract by voicing out against FaZe and attempting to form another esports organisation.
In July 2020, Turner Tenney’s original lawsuit was dismissed in California, whereas a trial was set this coming October for FaZe’s lawsuit in New York. Nevertheless, in August 2020, a joint statement was issued, stating that: “FaZe Clan and Turner Tenney are pleased to announce that they have resolved their disputes and settled their litigations. The parties wish one another the best of luck in future endeavors.”
To read more regarding Faze’s lawsuit, please visit the link below:
This case concerned an esports advertising dispute of US$2.3 million. Three suspects pretended as marketing representatives of Lao Gan Ma and signed an agreement with Tencent with a fake Lao Gan Ma’s company seal. The underlying motive of these three suspects was to obtain the CD-keys for Tencent games.
Nonetheless, in July 2020, both companies reached a settlement, and Tencent Holdings withdrew the lawsuit from the Shenzhen Nanshan Court. Both companies seek to have a genuine partnership in the future.
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This case involved Apple’s alleged antitrust and anti-competitive behaviour. Apple removed Fortnite from its App Store as Epic violated its App Store’s guidelines when it provided Fortnite users with an option to pay directly in its app. In fact, 30% of a transaction amount shall be paid to Apple as a commission.
The recent ruling by US District Court Judge Yvonne Gonzalez Rogers held that the Fortnite game may not be restored to the App Store for now. However, Apple is also not allowed to block Epic Games developer accounts or restrict it from using Unreal Engine and the developer tools. It is worth noting that however, Epic Games’ account on the App Store was terminated by Apple on 28 August 2020.
The case is set to be heard in court in September 2020.
Similar to its lawsuit against Apple, Epic Games filed an anti-competitive lawsuit against Google as Google delisted Fortnite from its Play Store.
In May 2020, there were two lawsuits filed by Nintendo against UberChips and anonymous websites respectively. It was alleged that the defendants sell products from “Team Xecuter”, consist of an unauthorised operating system and accompanied by piracy tools that install the system. As such, the Nintendo Switch consoles may be hacked and users can play pirated games with it. Nintendo seeks damages and injunctions to stop these websites from operating, as these circumvention devices will harm Nintendo greatly.
On 18 May 2020, it was reported by Polygon that the UberChips site is offline and states that it is “under maintenance”, whereas the anonymous websites in the lawsuit are still running.
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In March 2020, Tencent brought an action against a Guangzhou-based technology company. Tencent alleged that the Guangzhou-based company made Tencent’s games such as League of Legends (LOL), CrossFire, and Dungeon Fighter Online available via cloud gaming. This allegedly led to an unfair competition with Tencent Start and its partnership with WeGame to bring its games available on the cloud.
Although Tencent seeks damages exceeding RMB 9.6 million, the court in Hangzhou has ruled in August 2020 that the Guangzhou-based company should compensate Tencent for RMB 2.58 million, stop infringement and delete users’ data in the cloud gaming platform.
To know more about the details, kindly click in to the link below:
In May 2020, a lawsuit was filed in Nevada District Court, by two Skillz players, Alyssa Ball and John Prignano, alleging that the gaming platform, Skillz cheated their money. This is because the players were banned from their accounts and their money was confiscated. Thus, they seek damages amounting to US $5.9 million under counts such as fraud, negligence and unjust enrichment.
Nevertheless, Skillz counterclaimed that both of them are cheaters, trying to intimidate Skillz and seek illegitimate gains. In July 2020, Skillz also claimed that this issue should be resolved under arbitration instead.
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Disputes are common in any industry, and esports is no exception. The key is of course to find ways to evade disputes and to do so would include effective management of legal issues and matters. Stay tuned for the Second Part of this Article where we will address other legal matters in esports.
Published on 8 September 2020