US Federal Trade Commission Files Complaint Against Microsoft for Layoffs at Activision Blizzard
The US Federal Trade Commission (FTC) has lodged a complaint against Microsoft, asserting that the recent layoffs at Activision Blizzard violate the terms set for the company acquisition. The FTC claims that Microsoft’s actions contradict its earlier assurances that Activision Blizzard would remain an independent entity after the merger, with the status quo maintained. The FTC argues that Microsoft’s promise to divest any or all of the Activision businesses in the event of a divestiture order is now undermined by the layoffs.
FTC Accuses Microsoft of Rendering Activision Blizzard Non-Independent
According to the FTC, Microsoft’s layoffs at Activision Blizzard have compromised the independence of the company. By targeting areas of overlap within the business, the FTC argues that Microsoft has contradicted its claims to maintain an independent operating structure post-merger. The layoffs, as outlined in the FTC filing, have stripped Activision Blizzard of the ability to separate from Microsoft and seek effective relief in future administrative proceedings.
Reported Layoffs Underscore the FTC’s Need for Injunctive Relief
The FTC has highlighted Microsoft’s recently announced plan to eliminate 1,900 jobs in its video game division, including at Activision Blizzard, as proof that the company’s actions go against its declarations to the court. The FTC asserts that these reported layoffs further justify the need for injunctive relief pending the completion of the administrative proceeding.
Uncertain Outcome for FTC’s Complaint Against Microsoft
The outcome of the FTC’s complaint against Microsoft remains unclear at this stage. Despite the FTC’s repeated efforts to halt and reverse the Activision Blizzard acquisition by Microsoft, their attempts have so far proven unsuccessful. The situation continues to develop, and further updates regarding this latest filing are anticipated.
Analyst comment
Negative news: The US Federal Trade Commission (FTC) has filed a complaint against Microsoft for layoffs at Activision Blizzard, arguing that it violates the terms of the acquisition and compromises the independence of the company. The outcome of the complaint is uncertain, but the FTC’s efforts to halt the acquisition have been unsuccessful thus far. The market is likely to react with caution and uncertainty until a resolution is reached.
