US senators ‘deeply concerned’ about proposed Xbox Activision merger

Four US senators have written to the Federal Trade Commission (FTC) to express their concern over the proposed merger between Microsoft and Activision Blizzard.

It was announced in January that the Xbox maker intends to purchase Activision Blizzard in a $68.7 billion deal—the game industry’s biggest ever by some distance—that would give Microsoft exclusive ownership of franchises including Call of Duty, Warcraft, Overwatch, Crash Bandicoot and Guitar Hero.

The FTC is handling an antitrust review of the deal to determine whether the takeover constitutes unfair competition.

On Thursday, US senators Elizabeth Warren, Bernie Sanders, Sheldon Whitehouse and Cory Booker sent a letter to FTC chairwoman Lina Khan expressing their concern that the deal “threatens worker-led demands for accountability” over allegations of sexual misconduct and discrimination at Activision Blizzard.

“The proposed merger has already impeded unionization efforts and undermined workers’ calls for accountability,” they wrote. “Over 1,800 Activision Blizzard employees signed a letter calling on Mr. Kotick to step down from the organization, one of union organizers’ key demands.

“However, Microsoft’s proposed deal with Activision Blizzard is protecting Mr. Kotick, keeping him in his role as CEO until at least 2023 and guaranteeing him hundreds of millions in profit and a potential additional golden parachute worth over $14.5 million if he does not step down voluntarily.

“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.”

In response, an Activision spokeswoman told the Wall Street Journal that no additional special compensation arrangements were made for Kotick in connection with the Microsoft deal.

“This is a compelling transaction for all stakeholders, including employees,” she said.

And on the subject of workplace culture improvements, Microsoft corporate vice president and general counsel Lisa Tanzi told WSJ: “We believe Activision Blizzard will continue making progress, and we’re committed to further progress after the deal closes.”

In November, a WSJ report alleged that Kotick was aware of multiple sexual misconduct allegations at Activision Blizzard.

In a statement at the time, a company spokesperson said Kotick “would not have been informed of every report of misconduct at every Activision Blizzard company, nor would he reasonably be expected to have been updated on all personnel issues”.

The Activision Blizzard board also released a statement saying it remained confident in Kotick’s leadership.

Earlier this week, a federal court judge said she would approve Activision Blizzard’s $18 million settlement of a sexual harassment lawsuit filed last year by the US Equal Employment Opportunity Commission.

California’s Department of Fair Employment and Housing is also suing Activision Blizzard over its alleged failure to handle sexual harassment and discrimination against female employees.

Related Forum: Call of Duty Forum



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