The antitrust division of the U.S. Department of Justice is currently investigating the Overwatch League due to its soft salary cap policy. This policy is put in place to prevent excess spending by teams.
As reported by Dot Esports, DOJ trial attorney Kathleen Simpson Kiernan, who works with the Civil Conduct Task Force subdivision of the antitrust division, is spearheading the probe. The website’s sources claim that the DOJ conducted interviews with a number of former Overwatch League employees.
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The main reason for the investigation seems to be the lack of a players’ union. This allows the Overwatch League to apply for “nonstatutory labor exemption.” The report mentions that the soft salary cap threshold was $1.6 million in 2020 based on various sources. If annual player salaries of a team were to exceed that amount, the organization would have to pay the excess amount in luxury tax to the league, as well as player salaries.
“We have received an inquiry from the Department of Justice and are cooperating accordingly,” said an Activision Blizzard Esports spokesperson to 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.”
Keeping up with the esports drama, Faze Clan has suspended three members and removed one permanently due to allegations of cryptocurrency fraud. The organization put out a statement on Twitter, distancing itself from the players’ actions as well as condemning their behaviour.
Kay, Jarvis, Nikan, and Teeqo were involved in a scheme known as a “rug-pull” which involves orchestrating an event to bump up the value of a stock or cryptocurrency. The manufacturers, who would have purchased the cryptocurrency earlier at a lower cost, then sell while the price is high. The cryptocurrency in question is called Save the Kids, which aims to redistribute wealth to charity.
While the others were temporarily suspended, Kay was permanently removed as they were involved in a number of such schemes previously. There have also been accusations stating that the Save the Kids project was started as a way to defraud investors in the first place.