U.S. Senators Elizabeth Warren, Bernie Sanders, Cory Booker and Sheldon Whitehouse have sent a letter to FTC Chairman Lina Khan asking her to investigate whether Microsoft’s planned acquisition of Activision Blizzard would worsen the company’s work environment . reported in the letter, Wall Street Journalalso called on CEO Bobby Kotick to remain in his role and a “golden parachute” at the company, saying failure to hold him accountable for the workplace culture he has allowed to flourish “would be an unacceptable takeover” the result of”.
“Activision Blizzard employees have called for greater transparency and accountability in the gaming industry after years of rampant sexual misconduct and discrimination and unfair labor practices, and we are deeply concerned that this acquisition may further disenfranchise these employees. rights and prevent their voices from being heard,” the letter said.
“As this proposed transaction progresses through the review process, the Federal Trade Commission (FTC) should assess whether the failure of these companies to protect the rights and dignity of their workers is driven by monopoly power or constitutes anticompetitive harm to our labor market, if Yes, if the merger would exacerbate these problems.”
The letter specifically mentions Activision Blizzard’s reported “fraternity boy” culture and a recent $18 million settlement with California’s Equal Employment Opportunity Commission over complaints of sexual harassment and discrimination against the company. It also notes that Activision Blizzard is facing an SEC investigation into its handling of workplace misconduct complaints, though he claims to the contrary that Kotick is actually aware of at least some allegations of sexual misconduct complaints, “including alleged assaults.” , and did not report to the board of directors or industry regulators.
The plight of QA workers has also raised concerns: the letter describes them as “undervalued and exploited”, working under sub-living wage contracts and subject to arbitrary layoffs.
Interestingly, while Microsoft is branding itself the good guy, at least in name, in this merger, recently saying it “won’t hinder” Activision Blizzard’s unionization efforts, the senators didn’t seem impressed, saying the proposed The takeover was in the company’s “cynic and ‘opportunistic’ attempt to exploit systemic problems”. They took an equally vague view of the promise of non-interference in union work, saying the promise was “so vague that Microsoft has multiple ways to undermine the unionization process and its consequences.”
But Kotick was clearly the main target of the senators’ ire. More than 1,800 Activision Blizzard employees have signed a letter calling for him to step down, but Microsoft is “protecting” him under the terms of the acquisition, keeping him CEO until at least 2023, and ensuring he’s paid handsomely when and where, the letter said. salary. He did leave.
“While shareholders, employees and the public have called on Kotick to take responsibility for the culture he has created, this lack of accountability would be an unacceptable outcome of Microsoft’s proposed acquisition.”
Stephen Totilo of Axios shared the full letter on Twitter:
To be clear, the FTC will investigate the proposed acquisition — which is mandatory. But the letter suggested the process could be tougher than expected. The general consensus earlier this year was that there could be “some drama” and ratification could happen, but the letter could increase FTC pressure to oppose it, especially given the Biden administration’s 2021 rhetoric. Interested in strengthening enforcement of antitrust laws “to address challenges posed by new industries and technologies.”
The FTC’s rejection of the deal is not without precedent, either. In December 2021, it sued Nvidia to stop its proposed acquisition of British chip designer Arm, which ultimately contributed to Nvidia’s decision to halt the acquisition.
“The FTC should consider the above history [in the letter] In assessing the likely anticompetitive effects of this massive merger, and carefully determining what Microsoft’s commitment to ‘not impede’ unionization efforts means,” the letter concluded. “If the FTC determines that the transaction could strengthen monopoly power and worsen worker relationships The negotiating position between the parties to this transaction, we urge you to object. “
In an email to PC Gamer, an Activision Blizzard spokesperson pointed to the recent approval of the company’s EEOC settlement and said the Microsoft acquisition “will not disrupt the implementation of the Activision Blizzard leadership team throughout 2021. any action and will continue to be implemented in 2022 on improving our workplace.
“The Activision Blizzard leadership team has discussed the company’s goals in detail with Microsoft, and Microsoft has reviewed Activision Blizzard’s new cultural commitments and actions to date, as well as their efforts,” the spokesperson said. “Microsoft stands behind the goals and the work being done. This is a compelling deal for all stakeholders, including employees.”
“There are no additional special compensation arrangements for Mr. Kotick in connection with the transaction. Mr. Kotick’s base salary has been reduced to California’s minimum annual salary (approximately $62,500 in 2022) and he will not receive any bonuses or serve on Activision Blizzard’s board of directors. The Workplace Responsibility Committee determines that Activision Blizzard has made appropriate progress toward its transformational gender-related goals and other commitments described in this announcement before granting the equity.”
I’ve reached out to Microsoft for comment and will update if I hear back.