The United States Federal Trade Commission (FTC) is back in charge against the acquisition of Activision Blizzard from Microsoft and in these hours he filed a complaint with federal bodies regarding the company's plans to fire 1,900 people within the Xbox division.
According to the antitrust authority, these cuts to Activision Blizzard's staff (which represent half of the total) are in contrast with the promise made by Microsoft to keep ABK operationally independent in case the acquisition was successful. “Microsoft reportedly said the layoffs were part of an 'execution plan' that would reduce 'areas of overlap' between Microsoft and Activision, which it is inconsistent with Microsoft's suggestion to this Court that the two companies will operate independently after the merger,” the FTC said.
“Furthermore, the elimination of thousands of jobs reportedly undermines the FTC's ability to order effective intervention should the ongoing administrative proceeding lead to a determination that Microsoft's acquisition of Activision violated Section 7 of the Clayton Act.”
The FTC doesn't give up
Although the acquisition of Activision Blizzard has already been completed after the FTC was denied its request for a preliminary injunction last year, under US law the FTC still has the power to demonstrate in court that the merger creates a risk of monopoly and therefore ensure that it is annulled.
A hypothesis that is difficult to materialise, but Microsoft last year declared that there would be no problems in splitting Activision Blizzard as “the post-merger company will be structured and managed in such a way as to allow Microsoft to sell any or all of its assets of Activision as strong market players in the unlikely event that such a divestiture is ordered.”
In practice, according to the FTC the layoffs announced by Microsoft would undermine the independence of Activision Blizzard in case the acquisition is canceled and would make it more difficult for the antitrust authority to request the cancellation of the merger.
However, it must be said that Activision Blizzard's headcount matters almost 10,000 people (9,800 in 2021), so the impact of the announced layoffs may not be as drastic as portrayed by the Federal Trade Commission.
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