Microsoft purchase of Activision under regulatory scrutiny as lawmakers call out 'frat boy' culture
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A group of prominent senators wrote a letter to the Federal Trade Commission on Thursday urging them to review Microsoft's $68.7 billion acquisition of Activision, citing lawsuits and media reports about workplace misconduct at the video game giant.
"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," Sens. Elizabeth Warren, D-Mass., Bernie Sanders, I-Vt., Sheldon Whitehouse, D-R.I., and Cory Booker, D-N.J., wrote in the letter.
"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," they added.
Microsoft announced the blockbuster all-cash deal in January, but Activision is facing a host of lawsuits and investigations that could upend the purchase.
A building on the Microsoft Headquarters campus is pictured in Redmond, Washington. (Stephen Brashear/Getty Images)
California’s Department of Fair Employment and Housing sued Activision, the maker of popular franchises like Call of Duty and World of Warcraft, alleging that female workers were harassed and underpaid.
"DFEH alleges that women were subjected to constant sexual harassment, including groping, comments, and advances," the agency said last summer. "The lawsuit also alleges that the company’s executives and human resources personnel knew of the harassment and failed to take reasonable steps to prevent the unlawful conduct, and instead retaliated against women who complained."
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A judge approved an $18 million settlement between Activision and the U.S. Equal Employment Opportunity Commission this week over misconduct. The money will be set aside for eligible victims of discrimination at the company.
The Activision Blizzard Booth during the Electronic Entertainment Expo in Los Angeles. (AP Photo/Jae C. Hong)
A spokesperson for Activision cited that settlement on Thursday, saying that the company is "committed to a safe and equitable working environment for all employees."
"Activision Blizzard’s leadership team has discussed the company’s goals at length with Microsoft, and Microsoft has reviewed the renewed culture commitment and actions Activision Blizzard have done so far, and the efforts they´ve undertaken," the Activision spokesperson told FOX Business.
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Lisa Tanzi, a vice president and general counsel at Microsoft, said the company will work with the FTC on all the issues that have been raised around Activision.
"We believe Activision Blizzard will continue making progress, and we’re committed to further progress after the deal closes," Tanzi told FOX Business in a statement. "We will constructively engage on unionization issues and will further discuss all of this with the FTC."
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Shares of Activision stock closed down .3%, while Microsoft fell 1.77% on Thursday.