March 31, 2022

Warren, Sanders, Whitehouse, Booker Urge FTC Chair Lina Khan to Carefully Scrutinize Proposed Microsoft-Activision Merger and Its Impact on Workers

“We are deeply concerned about consolidation in the tech industry and its impact on workers, and this proposed merger has already hurt workers at Activision Blizzard in their fight for a stable job and a safe working environment.”

“The FTC should consider the history described above when assessing the anticompetitive effects that this gigantic merger may produce.”

Text of Letter (PDF)

Washington, D.C. - United States Senators Elizabeth Warren (D-Mass.), Bernard Sanders (I-Vt.), Sheldon Whitehouse (D-R.I.), and Cory Booker (D-N.J.) sent a letter to Federal Trade Commissioner (FTC) Chair Lina Khan raising concerns about the proposed Microsoft-Activision merger and requesting that the agency closely examine its impact on workers. This letter follows Microsoft’s recent announcement of its proposed $68.7 billion acquisition of Activision Blizzard, a gaming company facing internal blowback after years of an unchecked culture of sexual misconduct and discrimination. The lawmakers note that the proposed merger threatens worker-led demands for accountability and could create a dangerous precedent in the industry. They also urge the FTC to oppose the merger if the agency determines that the proposed transaction will enhance monopsony power and worsen the conditions for workers.

“Workers at Activision Blizzard, following years of rampant sexual misconduct and discrimination and unfair labor practices, have led calls for greater transparency and accountability in the gaming industry, and we are deeply concerned that this acquisition could further disenfranchise these workers and prevent their voices from being heard,” said the senators. 

Activision Blizzard’s “frat boy” culture has come to light in recent years as regulators investigated allegations of sexual misconduct and discrimination, and Activision Blizzard employees have spoken up about their experiences at the company. In September 2021, Activision Blizzard agreed to pay $18 million to settle allegations with the Equal Employment Opportunity Commission (EEOC) over gender-based harassment and retaliation. Following an investigation that started in May 2020, the EEOC alleged that Activision Blizzard employees were subjected to sexual harassment and the company “failed to take corrective and preventative measures.” In July 2021, a lawsuit was filed against Activision Blizzard alleging gender-based discrimination, harassment, and retaliation. The Wall Street Journal also reported that Activision Blizzard’s CEO Bobby Kotick was not only aware of the cultural problems at the company, but failed to tell the Board of Directors and, in at least one case, directly intervened to protect guilty executives.

In addition to the rampant sexual harassment and discrimination at the company, Activision Blizzard has exploited quality assurance (QA) employees through unpredictable and unsustainable working conditions, and abruptly fired significant sections of the team from their Raven Software studio. Employees at Activision Blizzard have engaged in several efforts to improve company culture, including at least three well-publicized walkouts and a unionization drive among QA testers with the Communication Workers in America (CWA). However, Microsoft’s proposed acquisition could interfere with Raven Software workers’ unionization push. Activision Blizzard has declined to voluntarily recognize the union and engaged in union-busting behavior. In a 2022 proxy statement, Activision Blizzard committed not to “voluntarily recognize any labor union, works council or similar employee organization or enter into a collective bargaining agreement” absent Microsoft’s approval, adding a further barrier for workers’ organizing efforts. Although Microsoft yesterday promised that it would not “stand in the way” if Activision Blizzard recognized the proposed union, the actions of both Activision Blizzard and Microsoft throughout the merger process undermine this statement.

As Raven Software and Activision Blizzard drag out the unionization process, many of the workers’ calls are already going ignored in the Microsoft acquisition. 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. Microsoft’s own history with workers also presents an alarming sign for how Microsoft would treat Activision Blizzard employees. In 2014, 38 of Microsoft’s temporary workers in quality assurance successfully formed a union, only to see the company eliminate all of their jobs two years later. 

Chair Khan recently stated that “robust antitrust enforcement can help ensure that workers have the freedom to seek higher pay and better working conditions, and can help promote economic opportunity and widespread prosperity for all.”

“Evaluating whether prospective transactions may harm our labor markets is a critical part of this enforcement, and our Prohibiting Anticompetitive Mergers Act would require the antitrust agencies to keep workers front and center throughout any merger-review process,” continued the senators.

Senator Warren has been urging the Biden Administration to closely scrutinize potential anti-competitive mergers in diverse industries. Recently, Senator Warren introduced the Prohibiting Anticompetitive Mergers Act which would prevent megamergers like the proposed Microsoft-Activision merger. In the past year, Senator Warren has sent letters about the proposed mergers of Sanderson-Wayne, WarnerMedia-Discovery, and Amazon-MGM