A group of Democratic senators including Elizabeth Warren warned that Microsoft Corp.’s takeover of Activision Blizzard Inc. could squelch workers’ calls for accountability after years of well-documented sexual harassment at the game giant.
The Federal Trade Commission, which is conducting an antitrust review of the deal, should consider whether Microsoft’s Activision acquisition could worsen the abuse and oppose the merger if they so determine, the senators wrote in a letter to FTC Chair Lina Khan.
“While Microsoft capitalized on lower stock prices from the sexual misconduct disclosures, they also signaled that they were willing to prioritize profits over entrenched issues of gender-based discrimination in the organization,” wrote the senators, including Sheldon Whitehouse of Rhode Island, Bernie Sanders of Vermont, and Cory Booker of New Jersey.
Activision Blizzard said in a statement that the acquisition won’t interrupt any actions the company has taken to improve the workplace and added that Microsoft is supportive of those goals.
Activision has been shrouded in controversy since last July after a state agency filed a sexual bias lawsuit against the Santa Monica, California-based company, describing its “frat boy culture” and accusing its leadership of failing to take action. The U.S. Securities and Exchange Commission later launched an investigation into how the company handled the reports of misconduct.
Under terms of the deal, Activision’s embattled Chief Executive Officer Bobby Kotick would remain in his job until at least next year, with a $14.5 million payout if he’s forced to resign. While Microsoft has said it won’t interfere with a union drive at Activision, the statement amounts to “little more than lip service” in the absence of legal assurances, the senators wrote.
“If the FTC determines that the transaction is likely to enhance monopsony power and worsen the negotiating position between workers and the parties to this deal, we urge you to oppose it,” the Senators wrote.
The four senators are concerned the deal could undermine calls for accountability at the video game giant.
A group of four US senators is urging the Federal Trade Commission to review Microsoft's $68.7 billion deal to acquire video game giant Activision Blizzard. In a letter to FTC Chairwoman Lina Khan, the senators raised concerns that the planned acquisition would undermine "calls for accountability over alleged misconduct" at Activision Blizzard, as reported earlier Thursday by The Wall Street Journal.
"We are deeply concerned about consolidation in the tech industry and its impact on workers," the letter says. The letter was sent by Sens. Elizabeth Warren, a Massachusetts Democrat; Bernie Sanders, a Vermont independent; Cory Booker, a New Jersey Democrat; and Sheldon Whitehouse, a Rhode Island Democrat.
In January, Microsoft announced plans to take over scandal-plagued Activision Blizzard. The deal would make Microsoft the world's third-largest video game maker and give it control over popular franchises like Call of Duty and World of Warcraft. Microsoft also pledged to clean up Activision Blizzard, which has a reputation for a toxic work culture and has faced allegations of harassment and discrimination. The deal already faces lawsuits from shareholders.
On Wednesday, a judge approved an $18 million settlement between Activision Blizzard and the US Equal Employment Opportunity Commission. The settlement ended a lawsuit filed by the EEOC in September that accused the video game company of violating the civil rights of employees by subjecting them to sexual harassment, pregnancy discrimination and retaliation.
Activision Blizzard on Thursday said Microsoft is supportive of its efforts to create an appropriate workplace.
"The company is committed to a safe and equitable working environment for all employees and has invested significant resources to ensure we're creating a model for the industry," said an Activision Blizzard spokesperson in an emailed statement. "The transaction between Microsoft and Activision Blizzard will not interrupt any of the actions the Activision Blizzard's leadership team has implemented throughout 2021 and is continuing to implement in 2022 with regards to improving our workplace."
Microsoft's Lisa Tanzi, a corporate vice president, added that the company believes Activision Blizzard will continue to make improvements and that Microsoft is "committed to further progress after the deal closes."
The senators in their letter to the FTC reportedly called out that Activision CEO Bobby Kotick will remain in his role until the deal closes in 2023 and potentially receive a large exit package, despite calls from employees and shareholders for him to resign.
The FTC and offices for the senators didn't respond to requests for comment.