FTC accuses Microsoft of misrepresenting its Activision Blizzard plans after layoffs

A week after Microsoft laid off nearly 2,000 workers in its gaming division, the Federal Trade Commission is accusing Microsoft of breaking its promise to allow Activision Blizzard to operate independently after its acquisition. FTC filed a complaint In a federal appeals court on Wednesday, Activision argued that last week’s layoffs affecting Blizzard employees “are inconsistent with Microsoft’s representations in this proceeding.” The FTC is asking for a temporary hold on Microsoft’s acquisition of Activision Blizzard as it investigates potential antitrust issues.

In its arguments regarding the FTC the last two years, Microsoft said it would treat Activision Blizzard as a vertical acquisition, and that there would be no layoffs as there would be no layoffs. On January 30, Microsoft announced this 1900 jobs were cut Especially after identifying the “areas of overlap” between Microsoft and Activision Blizzard, between Activision Blizzard, ZeniMax and Xbox. This discrepancy is the basis of the FTC’s complaint.

“Microsoft’s recently announced plan to dismiss 1,900 cases in its video game division, including its newly acquired Activision division, contradicts the above statements it made to this Court,” the FTC’s complaint states. “In particular, Microsoft has stated that the layoffs are part of an “execution plan” that will 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 after the merger. .”

Although the UK Competition and Markets Authority It approved the $69 billion acquisition of Microsoft In October, Activision Blizzard was not satisfied with the FTC’s antitrust concerns. The FTC is still challenging the acquisition, meaning Microsoft may be forced to divest all or part of Activision Blizzard.

In Wednesday’s complaint, the FTC argued that the latest cuts also undermine the ability to order relief for workers adversely affected by the buyout.

Microsoft’s cuts are also included an avalanche of mass shootings in the video game industry, especially in the last few months. An estimated 10,500 people lost their jobs in video games in 2023 – and 6,000 workers are already cut in 2024.

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