The FTC isn’t too happy with Microsoft’s Activision Blizzard layoffs
And it’s still looking to reverse the already-completed deal
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And it’s still looking to reverse the already-completed deal
One week after Microsoft laid off nearly 2,000 employees in its gaming division, the Federal Trade Commission is accusing Microsoft of contradicting its pledge to allow Activision Blizzard to operate independently post-acquisition. The FTC filed a complaint in a federal appeals court on Wednesday, arguing that last week’s downsizing, which affected employees of Activision Blizzard, “contradicts Microsoft’s representations in this proceeding.” The FTC is asking for a temporary pause of Microsoft’s acquisition of Activision Blizzard as it further investigates potential antitrust issues.
In its arguments to the FTC over the past two years, Microsoft said it would treat Activision Blizzard as a vertical acquisition and suggested that it wouldn’t need to institute layoffs, since there would be no redundancies. On January 30, Microsoft announced it was cutting 1,900 jobs across Activision Blizzard, ZeniMax and Xbox after identifying “areas of overlap” specifically between Microsoft and Activision Blizzard. This discrepancy is the core of the FTC’s complaint.
“Microsoft’s recently-reported plan to eliminate 1,900 jobs in its video game division, including in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Court,” the FTC’s complaint said. “Specifically, Microsoft reportedly has stated that the layoffs were part of an ‘execution plan’ that would reduce ‘areas of overlap’ between Microsoft and Activision, which is inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger.”
Though the UK’s Competition and Markets Authority approved Microsoft’s $69 billion acquisition of Activision Blizzard in October, the FTC hasn’t seen satisfaction regarding its own antitrust concerns. The FTC is still challenging the acquisition, which means there’s a possibility that Microsoft will be forced to divest all or part of Activision Blizzard.
In Wednesday’s complaint, the FTC argued that the recent layoffs also undermine its own ability to order relief for employees who were negatively affected in the acquisition.
Microsoft’s layoffs join an avalanche of mass firings in the video game industry, specifically in the past few months. An estimated 10,500 people in video games lost their jobs in 2023 — and already in 2024, 6,000 workers have been laid off.
This article originally appeared on Engadget at https://www.engadget.com/ftc-accuses-microsoft-of-misrepresenting-its-activision-blizzard-plans-after-layoffs-215502314.html?src=rss
The EU Commission today announced its approval of Microsoft’s $68.7 billion acquisition of gaming studio Activision Blizzard, a month after the UK’s Competition and Markets Authority (CMA) ruled against the deal.
While the Commission said it was reassured that the commitments offered by Microsoft “fully address the competition concerns identified by the Commission,” the approval is conditional on full compliance with the commitments. An independent trustee under supervision of the Commission will be in charge of monitoring their implementation.
“As always, the Commission has based its decision on hard evidence, and on extensive information and feedback from competitors and customers, including from game developers and distributors as well as cloud game streaming platforms in the EU,” a statement on the Commission’s website read.
Microsoft’s proposed buyout of Activision Blizzard just received some good news. The European Commission have today approved the $70 billion acquisition, saying that Microsoft’s commitments “represent a significant improvement for cloud gaming.” That’s a markedly different tone to the UK’s conclusion last month, as the British regulator blocked the acquisition over concerns about the cloud market’s future.
Following the controversial rejection of the Activision Blizzard x Microsoft merger from the UK’s Competition and Markets Authority (CMA), the institution has imposed additional restrictions on the deal going forward.
This restriction largerly revolves around the newfound necesity for Microsoft to recieve written consent from the CMA before acquiring an Interest in Activision or any of its subsidiaries, acquiring an Interest in an enterprise holding an Interest in Activision, or holding an option to acquire an interest a company mentioned prior.
In basic terms, the CMA has demanded that any future move to acquire any aspect of Activision by Microsoft must first recieve its explciity approval. The official interim order where this was first announced states that this was done to halt any pre-emptive action from either Activision or Microsoft.