In July 2016, Twitch suspended James "PhantomL0rd" Varga, a streamer who at the time had nearly 1.4 million followers, over his association with CSGO skin gambling site CSGOShuffle. Esports journalist Richard Lewis said a record of email exchanges between Varga and CSGOShuffle coder Duhau Joris that he'd obtained "heavily suggest, almost to a degree of certainty," that Varga actually owned the site, a fact he neglected to mention in streams where he used and promoted it, and gambled with "house money" rather than his own.
That's in violation of FTC and Valve rules, which means it also violated the Twitch terms of service, and as a result his channel was suspended. But now Varga has filed a lawsuit (via Unikrn) against Twitch over the suspension, saying that Twitch improperly suspended his account and then terminated his contract without providing an explanation as to why.
The lawsuit alleges that Varga's contract obligated Twitch to provide written notice of violations, as well as an opportunity to correct them within 30 days, but neither the notice nor the corrective window were provided. Furthermore, the allegations that led to the suspension arose from "unsubstantiated, false accusations leveled at Varga by a third party, whose accusations were the culmination of an effort to publicly disparage Varga and take advantage of his popularity."
"It is clear from Twitch's conduct that the stated bases for suspension and termination were an effort to deflect negative press and scapegoat Varga, allowing Twitch to publicly decry alleged gambling conduct and divert attention from the fact that Twitch continued to knowingly allow such conduct to continue on other Twitch channels," the suit states.
Varga alleges that he wasn't given a reason for the suspension until January 2017, nearly five months after it happened, when a Twitch rep told him that his channel had fraudulent subscribers. At some point after that, however, he was told that the real problem was the amount of non-gaming content he streamed, including CSGO skin gambling, which violated content guidelines.
But Varga claims that he was told multiple times by Twitch employees that he could stream such content for up to 30 consecutive minutes at a time, and that Twitch "was aware that the representation was false."
The suit says Varga suffered significant financial and reputational harm as a result of the suspension, which occurred despite him fully satisfying all the conditions of his contract. He's seeking general, special, and exemplary damages, interest, legal fees (including "expert witness fees"), and whatever else the court deems appropriate.
Varga, as far as I can tell, has not returned to Twitch since his initial suspension, but he's been streaming on YouTube since last year. A Twitch rep said the company does not comment on pending litigation.