Update 8:20 p.m. ET: Activision Blizzard said it's working with Microsoft on improving its culture.
Update April 1, 7:10 p.m. ET: Microsoft echoes Activision Blizzard's response.
What you need to know
- Four U.S. senators have written to the Federal Trade Commission citing their concerns over Microsoft's proposed $68.7-billion acqusition of Activision Blizzard.
- They've specifically called out how Activision Blizzard has "failed to protect the rights" of workers and the lack of accountability of about CEO Bobby Kotick's alleged misconduct.
- The letter also calls out how Activision Blizzard hasn't recognized the Raven Software QA union.
The proposed Microsoft and Activision Blizzard deal is headed to the Federal Trade Commission (FTC), but four U.S. senators are urging the committee to consider the companies' histories with workers in their inquiry.
Sens. Elizabeth Warren, Bernie Sanders, Sheldon Whitehouse, and Cory Booker submitted the letter to FTC chairwoman Lina Khan on Thursday. The Wall Street Journal first posted the story, and Stephen Totilo of Axios posted the text of the letter on Twitter, which you can read below.
Here's the letter pic.twitter.com/EaKtBTvUIgHere's the letter pic.twitter.com/EaKtBTvUIg— Stephen Totilo (@stephentotilo) March 31, 2022March 31, 2022
In summization, the letter said that, "the FTC should consider the history described... when assessing anticompetitive effects that this gigantic merger may produce, and carefully determine the meaning of Microsoft's promise to 'not stand in the way' of unionization efforts."
The senators call out a number of things to Khan. First off, they go through the basics of the toxic workplace lawsuit, along with the recent update that the company's $18 million settlement to settle gender-based discrmination allegations was approved by the Equal Employment Opportunity Commission (EEOC) and the continued reports from current and former employees about the company.
The letter also notes how the Securities and Exchange Commission (SEC) is conducting an investigation into the executives, most prominently CEO Bobby Kotick, who is alleged to have covered up accusations of sexual misconduct at the company and have been aware of other incidents. Many employees and contractors have signed a petition calling for his removal. It's reported that Kotick will have a sizeable compensation package when he apparently steps down from his position following the Microsoft acquisition.
"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 continued.
The unionization efforts at Raven Software also got a mention. To recap: In January, multiple QA workers at the Call of Duty developer formed the Game Worker's Alliance following multiple layoffs and a seven-week-long strike. Activision Blizzard still has not recognized the union.
We've reached out to both Activision Blizzard and Microsoft for comment and we'll update the story if we hear back.
Update: Activision Blizzard statement
An Activision Blizzard spokesperson responded to Windows Central, stating that Microsoft has "reviewed the renewed culture committment and actions" the company has undertaken so far. The spokesperson also clarified that Kotick won't receive any bonuses or grants until Activision Blizzard has made progress towards fixing its company culture. Here's the statement in full:
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.
Update: Microsoft responds to FTC letter
Microsoft is echoing statements made by Activision Blizzard about the company's goal to address workplace culture. The full statement is below:
"Workplace culture is a critical priority for Microsoft. We believe Activision Blizzard will continue making progress, and we're committed to further progress after the deal closes. We will constructively engage on unionization issues and will further discuss all of this with the FTC," said Lisa Tanzi, Corporate Vice President & General Counsel at Microsoft.
