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Update: FTC files complaint against Microsoft over recent Xbox layoffs

Update: Microsoft has condemned the FTC's complaint, saying the regulator ignored how it previously changed the terms of its acquisition.

Justin Carter, Contributing Editor

February 7, 2024

2 Min Read
Logo for Microsoft's Xbox console.
Image via Microsoft.

At a Glance

  • The FTC argues that in laying off 1,900 workers, Microsoft reneged on keeping Activision Blizzard an independent operator.

Update (2/8/24): In a statement to Game Developer, Microsoft condemned the FTC for "ignoring the reality that the deal itself has substantially changed."

The Xbox maker argued it was required last year by the UK's CMA to restructure its deals. It also points to its Call of Duty and cloud-related agreements as further proof of its evolution.

In a separate letter, it said the FTC was unable to prove Microsoft has "both the ability and incentive" to make Call of Duty Xbox-exclusive. The FTC is unable to "articulate any harm" from the finished merger, it added, and has "incomplete and

misleading" asssertions.

The layoffs at Activision Blizzard were already going to happen, said Microsoft, merger or no. And if a divestiture was ordered, Activision Blizzard is operating in a way that it'd continue to be a "robust market participant."

However, Microsoft noted this with some skepticism, saying it would be an "unlikely" event to happen.

Original story: The regulatory battle over Microsoft's acquisition of Activision Blizzard isn't over yet. Per the Verge, the FTC has filed a complaint after the Xbox maker laid off 1,900 employees in January.

In its complaint, the FTC claims Microsoft contradicted an earlier promise to "maintain a pre-merger status quo." It wants the acquisition paused until it completes a proper antitrust evaluation.

By eliminating overlapping positions, Microsoft went back on its word. As such, Activision Blizzard isn't actually operating independently, making it hard for the FTC to "order effective relief" in potential administrative proceedings.

Last summer, the FTC filed a lawsuit and injunction against Microsoft to prevent the merger. Both failed, but it argues the new layoffs underscore "[our need] for injunctive relief."

Beyond pausing the acquisition, the FTC has no other claims at present. Game Developer contacted Activision Blizzard and Microsoft for comment, and will update when a response is given.

About the Author(s)

Justin Carter

Contributing Editor, GameDeveloper.com

A Kansas City, MO native, Justin Carter has written for numerous sites including IGN, Polygon, and SyFy Wire. In addition to Game Developer, his writing can be found at io9 over on Gizmodo. Don't ask him about how much gum he's had, because the answer will be more than he's willing to admit.

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