Senators Push FTC to Scrutinize Microsoft Acquisition of Activision Blizzard

Four U.S. senators sent a letter to the Federal Trade Commission on Thursday urging it to closely inspect Microsoft's proposed acquisition of Activision Blizzard, warning the deal could undercut pushes for accountability over the latter's reported culture of sexual harassment and gender-based discrimination.

Sens., Elizabeth Warren (Massachusetts), Bernie Sanders (Vermont), Cory Booker (New Jersey) and Sheldon White (Rhode Island) called on FTC Chairwoman Lina Khan to evaluate whether the acquisition could make the reported abuse worse, the Wall Street Journal reports.

"We are deeply concerned about consolidation in the tech industry and its impact on workers," reads the letter.

Activision Blizzard CEO Bobby Kotick is an explicit target in the letter, as the senators warn the acquisition could insulate him from the consequences of reportedly fostering and participating in the company's toxic culture.

"This lack of accountability, despite shareholders, employees, and the public calling for Kotick to be held responsible for the culture he created, would be an unacceptable result of the proposed Microsoft acquisition," the senators write. They go on to say the FTC should intervene in the acquisition if it finds its terms would "worsen the negotiating position between workers and companies," per the WSJ.

Kotick is expected to leave his role as CEO when the Microsoft acquisition is finalized in 2023 — if approved.

The letter arrives in the wake of a judge approving the $18 million settlement Activision Blizzard reached with the Equal Employment Opportunity Commission in one of several suits tied to its toxic work culture. The California Department of Fair Employment and Housing, which is also investigating Activision Blizzard for workplace abuses, objected to that settlement for offering victims too little compensation, and on grounds that it might interfere with the agency's ongoing suit. The judge in the case rejected these objections.

It's unclear what effect this letter will have. The FTC under Khan's leadership has done more to regulate tech conglomeration than it did during the Trump administration, but with strong competition in the games space from Nintendo and Sony it, the regulator may not see sufficient threat to competition in the Microsoft-Activision Blizzard merger.

An Activision spokeswoman told the WSJ the acquisition would not interrupt the steps the company has already taken to improve its workplace.

"Activision Blizzard's leadership 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."

Xbox head Phil Spencer has publicly come out against the kind of workplace abuses reported at Activision Blizzard. A report published earlier this week by Kotaku revealed less severe workplace troubles at the Microsoft-owned studio Undead Labs, providing Spencer the first major test of his stated values.

Activision Blizzard remains involved in two lawsuits tied to its workplace in addition to the DFEH suit: One filed on behalf of a former employee who killed herself after suffering abuse at the company, and another from a current employee who says she was sexually harassed and retaliated against.