At the heart of the FTC’s argument lies the apparent contradiction between Microsoft’s earlier assurances and its recent actions. During the initial merger review process, Microsoft told the courts that Microsoft and Activision Blizzard would operate as separate entities following the merger. The tech giant had also promised the court that it would maintain the pre-merger status quo.
However, Microsoft’s recent decision to cut more than 1,900 jobs in its video game division also included Activision employees. The FTC argues that had Activision been truly independent as Microsoft initially claimed, these layoffs at Activision would have never happened.
It’s worth noting that the job cuts at Activision Blizzard spanned several teams, including Blizzard’s esports divisions and subsidiary studio Toys for Bob. Also affected were employees associated with Blizzard’s unreleased survival game, codenamed Odyssey. Microsoft defended its actions and claimed that the layoffs were part of an “execution plan” to reduce “areas of overlap” between Microsoft and Activision.
The Ninth Circuit Court of Appeals is currently deliberating on the FTC’s appeal, and things could take an interesting turn if it rules in favor of the FTC.
