FTC Files An Official Complaint Against Microsoft Over Its 1900 Activision Blizzard Layoffs

A rough week for team Xbox just got a bit tougher as the Federal Trade Commission (FTC) has officially filed a complaint in a federal appeals court in regard to its decision to lay off 1,900 employees last month. The FTC is continuing to probe Microsoft’s acquisition of Activision Blizzard on anti-trust grounds.

The FTC says that Microsoft’s decision to conduct these layoffs directly contradicts statements the company made to the court. During this process, Microsoft informed the court that this merger would not be a horizontal integration where “competing entities integrate their operations and, in the process, often eliminate redundancies.” This statement certainly ended up not being true, as there are now nearly 2,000 people in the unemployment line.


The FTC is also claiming that the layoffs will make it difficult for it to properly handle the matter. The commission states that “the reported elimination of thousands of jobs undermines the FTC’s ability to order effective relief should the pending administrative proceeding result in a determination that Microsoft’s acquisition of Activision violated Section 7 of the Clayton Act.”

It's difficult to tell how big of an impact Microsoft’s post-merger maneuvering will have when it comes to the court’s decision. However, there is still the possibility that the company will be forced to unwind part of the merger or maybe the entirety of the merger.

Microsoft told the court that “the post-merger company will be structured and operated in a way that would readily enable Microsoft to divest any or all of the Activision businesses as robust market participants in the unlikely event that such a divestiture is ordered.” Time will tell if the court orders action as drastic as the unraveling of the entire acquisition.