Gaming FTC accuses Microsoft of misrepresenting its Activision Blizzard plans after layoffs

[tom_mai78101]

One week after Microsoft laid off nearly 2,000 employees in its gaming division, the Federal Trade Commission is accusing Microsoft of contradicting its pledge to allow Activision Blizzard to operate independently post-acquisition. The FTC filed a complaint in a federal appeals court on Wednesday, arguing that last week's downsizing, which affected employees of Activision Blizzard, "contradicts Microsoft’s representations in this proceeding." The FTC is asking for a temporary pause of Microsoft's acquisition of Activision Blizzard as it further investigates potential antitrust issues.

In its arguments to the FTC over the past two years, Microsoft said it would treat Activision Blizzard as a vertical acquisition and suggested that it wouldn't need to institute layoffs, since there would be no redundancies. On January 30, Microsoft announced it was cutting 1,900 jobs across Activision Blizzard, ZeniMax and Xbox after identifying "areas of overlap" specifically between Microsoft and Activision Blizzard. This discrepancy is the core of the FTC's complaint.

"Microsoft’s recently-reported plan to eliminate 1,900 jobs in its video game division, including in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Court," the FTC's complaint said. "Specifically, Microsoft reportedly has stated that the layoffs were part of an 'execution plan' that would 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 post-merger."

FTC accuses Microsoft of misrepresenting its Activision Blizzard plans after layoffs

The FTC is accusing Microsoft of contradicting its pledge to allow Activision Blizzard to operate independently post-acquisition.

www.engadget.com

Court complaint docs and explanation below:

https://storage.courtlistener.com/recap/gov.uscourts.ca9.344453/gov.uscourts.ca9.344453.117.0_1.pdf

https://www.reddit.com/r/technology/comments/1alilqz/_/kpezi69

Jessica Conditt covers a complaint filed by the Federal Trade Commission:

• In its arguments to the FTC over the past two years, Microsoft said it would treat Activision Blizzard as a vertical acquisition and suggested that it wouldn't need to institute layoffs, since there would be no redundancies.
• On January 30, Microsoft announced it was cutting 1,900 jobs across Activision Blizzard, ZeniMax and Xbox after identifying "areas of overlap" specifically between Microsoft and Activision Blizzard. This discrepancy is the core of the FTC's complaint.
• "Microsoft’s recently-reported plan to eliminate 1,900 jobs in its video game division, including in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Court," the FTC's complaint said.
• "Specifically, Microsoft reportedly has stated that the layoffs were part of an 'execution plan' that would 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 post-merger."
• In Wednesday's complaint, the FTC argued that the recent layoffs also undermine its own ability to order relief for employees who were negatively affected in the acquisition.