US Senators "Deeply Concerned" About Microsoft's Proposed Deal To Buy Activision Blizzard

A group of US Senators, including Bernie Sanders and Elizabeth Warren, are calling for greater scrutiny over Microsoft's proposed buyout of Activision Blizzard, citing concerns about the reports of misconduct at the Call of Duty giant. The Wall Street Journal first reported on this. After the publication of this story, Activision Blizzard released a statement (see it below) in which it said Microsoft is supportive of Activision Blizzard's "goals and the work being done" to improve company culture.

The US Senators--including Elizabeth Warren, Bernie Sanders, Cory Booker, and Sheldon Whitehouse--wrote their letter to Federal Trade Commission chair Lina Khan. The lawmakers said the FTC ought to find out if Microsoft's proposed buyout of Activision Blizzard could "exacerbate the flurry of sexual-abuse, harassment and retaliation allegations at Activision stemming from recent federal and state investigations."

Just this week, a judge approved Activision Blizzard's settlement over workplace culture issues that will see the company create an $18 million fund to compensate and make amends to affected workers. This was just one of the lawsuits Activision Blizzard is facing regarding its workplace issues.

The senators also said they are concerned that Activision Blizzard CEO Bobby Kotick, who himself has been accused of knowing about and covering up instances of sexual harassment and other abuse, will remain with the company and potentially earn a massive payout under the terms of the deal. It's been reported that Kotick will leave after the deal goes through.

It's a rule that mergers of a significant size must be approved by the US government over antitrust matters, so a review was always going to happen. But the senators are submitting their feedback separate from that and to cite their own specific concerns. The WSJ previously reported that Khan, the FTC chair, would specifically look into whether or not Microsoft's proposed buyout of Activision Blizzard would "substantially lessen competition."

"We are deeply concerned about consolidation in the tech industry and its impact on workers," the Democratic Senators said in their letter, as reported by The Wall Street Journal.

Microsoft's CEO, Satya Nadella, believes that the deal will go through, which is not a surprise. He said in an interview that, if the deal should materialize, Microsoft will still be number three in terms of market share.

A spokesperson for Activision Blizzard sent along a statement in response to the US Senators lobbying the FTC to scrutinize the Microsoft/Activision Blizzard deal. You can read the full statement below.

"On Tuesday, the federal court approved a settlement agreement between Activision Blizzard and the EEOC that includes an $18M fund to compensate eligible claimants and to bolster enhancements to policies, practices, and training to prevent harassment and discrimination in the workplace, among other commitments. 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. 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. Activision Blizzard’s leadership team has discussed the company’s goals at length with Microsoft, and Microsoft has reviewed the renewed culture commitment and actions Activision Blizzard have done so far, and the efforts they've undertaken. Microsoft is supportive of the goals and the work being done. This is a compelling transaction for all stakeholders, including employees.

"No additional special compensation arrangements for Mr. Kotick were entered into in connection with the transaction. Mr. Kotick's base salary has been reduced to California's minimum annual salary (which is approximately $62,500 for 2022), and he will not be awarded any bonuses or equity grants until the Workplace Responsibility Committee of the Activision Blizzard Board of Directors has determined that Activision Blizzard has made appropriate progress toward achievement of the transformational gender-related goals and other commitments described in such announcement."

Microsoft is looking to pay $68.7 billion to acquire Activision Blizzard as part of the technology giant's biggest acquisition of all time. It would be just the latest big buyout from Microsoft, which purchased ZeniMax in 2021 for $7.5 billion.