New York City sues Activision Blizzard over Microsoft deal

By Cristina Alexander May 4, 2022

Activision Blizzard is now in even more legal trouble than before. New York City has sued the Call of Duty and World of Warcraft publisher over the acquisition deal it made with Microsoft in January.

According to Axios, which broke the news, the lawsuit was filed in Delaware by the New York City Employees’ Retirement System (a pension fund for the city’s firefighters, police officers and teachers) on April 26, and the public version of the complaint was shared on May 2.

The group alleges in the complaint that CEO Bobby Kotick only rushed the $70 billion sale of Activision Blizzard to Microsoft in order for him and the board of directors “to escape liability and accountability entirely” for the sexual misconduct and gender discrimination that took place at the company, which caused its stocks to plummet. When Microsoft agreed to buy the company for $95 per share, they say it devalued the stock even further. The discrimination allegations are the subject of an ongoing lawsuit filed by California’s Department of Fair Employment and Housing in July 2021.

“Given Kotick’s personal responsibility and liability for Activision’s broken workplace, it should’ve been clear to the board that he was unfit to negotiate a sale of the company,” the complaint reads. “Not only did the merger offer Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty, but it also offered Kotick the chance to realize substantial non-ratable benefits.”

New York demanded Activision Blizzard send a list of documents and other materials related to the sale, including information on five potential buyers and board memos. The city said has also been pressing the company for internal documents since last fall to find out the extent of Kotick’s knowledge about Activision Blizzard’s “frat boy culture” of sexual harassment and abuse during his tenure, which The Wall Street Journal reported about in November.

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Cristina Alexander

Gaming/Mobile Writer

Cristina Alexander has been writing since 2014, from opining about pop culture on her personal blog in college to reporting…

Gaming

FTC files lawsuit to block Microsoft’s Activision Blizzard acquisition

Lilith appears in a Church in Diablo 4.

The Federal Trade Commission (FTC) will sue Microsoft to block its acquisition of Call of Duty and World of Warcraft publisher Activision Blizzard.
A 3-to-1 vote ultimately determined the FTC's decision to issue the lawsuit as the commission fears that the deal would give Microsoft an unfair advantage in the gaming industry and hurt innovation. FTC Bureau of Competition Director Holly Vedova explained the FTC's intent in a press release.
"Microsoft has already shown that it can and will withhold content from its gaming rivals," she said. "Today, we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets."
That press release also highlights the FTC's belief that Microsoft's acquisition of ZeniMax Media is problematic due to a track record of "using valuable gaming content to suppress competition from rival consoles." In addition, after the Activision Blizzard acquisition, Microsoft could potentially "harm competition by manipulating Activision’s pricing, degrading Activision’s game quality or player experience on rival consoles and gaming services, changing the terms and timing of access to Activision’s content, or withholding content from competitors entirely."
This $69 billion acquisition has dominated gaming industry headlines all year as Microsoft has been doing all it can to make the deal seem favorable to the industry. As recently as December 6, Head of Xbox Phil Spencer emphasized the potential positives of this acquisition, confirming plans to continue to bring Call of Duty to Nintendo platforms and Steam for 10 years if the Activision Blizzard merger is complete.
By filing this complaint, the FTC begins proceedings that will result in a hearing and trial before an administrative law judge to determine whether or not Microsoft will acquire Activision Blizzard.

Gaming

Microsoft offered Sony a 10-year Call of Duty deal for PlayStation, report says

Call of Duty Modern Warfare 2.

Microsoft reportedly offered Sony a deal to keep the Call of Duty franchise on PlayStation for 10 years, according to a report by The New York Times. The tech giant announced its intention to acquire Activision Blizzard earlier this year for almost $70 billion, but the deal has come under intense scrutiny from regulators such as the U.K.'s Competition and Markets Authority (CMA) and the E.U.'s European Commission.

According to The New York Times, Microsoft said that on November 11 it had made an offer to keep Call of Duty on PlayStation for another decade. However, Sony declined to comment on this specific claim.

Gaming

Microsoft’s Activision Blizzard acquisition just hit another hurdle in the U.K.

Microsoft's nearly $70 billion acquisition of Activision Blizzard is under review internationally, and no country takes this matter more seriously than the United Kingdom. The Competition and Markets Authority (CMA) completed the first phase of its investigation into the deal and is now recommending putting it through a second phase.

The call for extra scrutiny into the deal between Microsoft and Activision Blizzard stems from the CMA's concern that such a deal may substantially stifle competition in the U.K.'s gaming market. Specifically, it's worried that if and when the merger goes through, Microsoft may make Activision Blizzard's portfolio of games exclusive to Xbox consoles, or make them available on PlayStation and Nintendo systems "on worse terms." It's also concerned that the company may leverage Activision Blizzard's games across console, PC, and cloud systems to harm competition in the growing cloud gaming space.