our U.S. senators sent a letter Thursday to the Federal Trade Commission citing concern about Microsoft Corp.’s proposed acquisition of Activision Blizzard Inc., saying the deal could undermine employees’ calls for accountability over alleged misconduct at the videogame company.
In the letter, viewed by The Wall Street Journal, Sens. Elizabeth Warren (D., Mass.), Bernie Sanders (I., Vt.), Cory Booker (D., N.J.) and Sheldon Whitehouse (D., R.I.) urge FTC Chairwoman Lina Khan to assess whether the planned transaction could exacerbate the flurry of sexual-abuse, harassment and retaliation allegations at Activision stemming from recent federal and state investigations.
“We are deeply concerned about consolidation in the tech industry and its impact on workers,” the letter says.
The senators note in their letter that the terms of the merger would enable Activision’s longtime chief executive, Bobby Kotick, to continue in his role until the transaction’s expected closing in 2023 and receive a potentially significant exit package upon his departure. Last summer more than 1,800 Activision employees signed a letter calling on Mr. Kotick to resign.
“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 letter says. If the FTC determines that the deal could worsen the negotiating position between workers and the companies, then the agency should oppose it, the letter says.
An Activision spokeswoman said the transaction between Microsoft and Activision won’t interrupt any of the actions that Activision’s leadership team implemented last year and so far this year with regards to improving its workplace.
“This is a compelling transaction for all stakeholders, including employees,” she said, adding that no additional special compensation arrangements were made for Mr. Kotick in connection with the transaction.
Microsoft corporate vice president and general counsel Lisa Tanzi said workplace culture is a critical priority for the company. “We believe Activision Blizzard will continue making progress, and we’re committed to further progress after the deal closes,” she said.
Microsoft’s roughly $75 billion deal for Activision is under review by the FTC, the Journal reported in February. Ms. Khan is expected to scrutinize whether the tech giant’s move to expand its videogame business will substantially lessen competition.
All proposed mergers of substantial size must be submitted for government antitrust review, which is conducted by either the FTC or the Justice Department. Both agencies have closely scrutinized tech deals in the past.
Santa Monica, Calif.-based Activision, known for its Call of Duty, World of Warcraft and Candy Crush franchises, has around 10,000 employees, and it posted close to $9 billion in revenue for 2021.
On Tuesday a federal judge approved an $18 million settlement between Activision and the Equal Employment Opportunity Commission, which had been investigating the videogame company on allegations of sexual harassment and retaliation.
“Our goal is to make Activision Blizzard a model for the industry, and we will continue to focus on eliminating harassment and discrimination from our workplace,” Mr. Kotick said ahead of the ruling in anticipation of its approval.
Separately, the California Department of Fair Employment and Housing is suing Activision for allegedly ignoring numerous complaints by female employees of harassment, discrimination and retaliation. Activision has said the lawsuit, which was filed in July, includes distorted, and in many cases, false descriptions of its past, and that it strives to pay all employees fairly.
In addition, the Securities and Exchange Commission is investigating Activision on its handling of employees’ allegations of sexual misconduct and workplace discrimination, the Journal reported in September. The federal agency subpoenaed Activision and several of its senior executives, including Mr. Kotick. A spokeswoman for the company has said it is cooperating with the SEC.