Activision boss responds to E.U. probe of $69 billion Microsoft merger
Microsoft wants to expand its gaming empire beyond Xbox and buy Activision Blizzard for a record $68.7 billion deal, but it’s facing further regulatory scrutiny.
The European Union announced on Tuesday it has launched an investigation into Microsoft’s merger. It is worried that the tech giant will limit access to Activision games, which could hurt competition.
Activision Blizzard CEO Bobby Kotick said in a town hall to employees on Wednesday that “Microsoft wants us because of our talent.”
Kotick added, in remarks viewed by The Post, “Our own board of directors, they recognized that this was a great cash premium in a very, very tenuous economic environment. You see all around us, companies laying off people.”
Kotick named competitors like Sony, Apple and Nintendo as vying for top talent.
“This week, as we expected, the European Commission announced we’ve entered the second phase of our review.” Kotick, who has been Activision’s CEO for over 30 years, said he thought the gaming industry is “incredibly fragmented” and that this merger is sensible.
Activision Blizzard employees’ biggest question to Kotick was about how the Microsoft deal would affect their work. He responded, “I don’t expect it will be a lot different than when Vivendi owned us. They let us run the business pretty independently. I think that’s largely going to be the case, Microsoft is likely to want to keep almost everybody.”
So far, regulators in Saudi Arabia and Brazil have approved the deal. The U.K.’s Competition and Markets Authority (CMA) is still investigating Microsoft and seeking more information, while the U.S. Federal Trade Commission has declined to share any details or confirm an investigation.
On Tuesday, the European Commission said it was concerned the deal could hurt the gaming and console distribution markets. It also said users could be less inclined to buy PCs that don’t run Microsoft’s operating systems. The Commission has until March 23 to issue a decision.
“We’re continuing to work with the European Commission on next steps and to address any valid marketplace concerns,” Microsoft spokesperson David Cuddy told The Washington Post. On Tuesday evening, at a New York media panel, Microsoft Gaming head Phil Spencer was asked what he was doing next after the Activision Blizzard merger closed.
“I love that I’m in the process of this $70 billion acquisition and the question is what are you doing after this?” Spencer said to audience laughter. “I’m working really hard to try to close this acquisition … Mobile is the largest gaming platform on the planet. We as Xbox feel we need to have more creative engagement on mobile to be the team that we want to be again, and discussions we’ve had for many, many years. I honestly don’t have a great answer. Maybe I should but I don’t on what happens after that.”
Top security and privacy executives quit Twitter
Twitter head of moderation and safety Yoel Roth quit after Twitter owner Elon Musk held his first all-hands meeting with staffers, Joseph Menn, Cat Zakrzewski, Faiz Siddiqui, Nitasha Tiku and Drew Harwell report. That came after the resignations of Chief Information Security Officer Lea Kissner, the company’s chief privacy officer and its chief compliance officer. Privacy staffers said they were most concerned by the quick release of new features without giving them full security reviews that are required under a consent decree with the Federal Trade Commission that requires the company to follow additional privacy and security requirements because of past data misuse allegations. They also cited Twitter owner Musk’s Wednesday night order that employees work in the office for 40 hours a week.
The FTC said it’s “tracking the developments at Twitter with deep concern” and is prepared to take action to ensure that Twitter is complying with the consent order. “No CEO or company is above the law, and companies must follow our consent decrees,” said FTC director of public affairs Douglas Farrar. “Our revised consent order gives us new tools to ensure compliance, and we are prepared to use them.”
Justice Department’s antitrust victories put wind in its sails
After high-profile losses in antitrust cases involving the sugar and health-care industries, the Justice Department’s antitrust division has notched a string of victories over the last month, including when a judge decided to block the merger of Simon & Schuster and Penguin Random House, Perry Stein reports.
“The Justice Department has not notched any big antitrust wins against technology giants, despite growing bipartisan momentum for expanding such enforcement,” Perry writes. “But experts say the antitrust division has been laying the groundwork to make those cases. The department has an ongoing case against Google, set to go to trial next year, that alleges that the company’s search and advertising functions violate antitrust laws.”
FTX’s loans to affiliated trading firm paved the way for implosion
FTX chief executive Sam Bankman-Fried told investors that trading firm Alameda Research owes FTX around $10 billion, the Wall Street Journal’s Vicky Ge Huang, Alexander Osipovich and Patricia Kowsmann report. Binance said this week that it planned to acquire FTX, but the deal fell apart on Wednesday with Binance citing “mishandled customer funds” that it found and press reports about U.S. regulators looking into FTX.
The Justice Department and the Securities and Exchange Commission are investigating FTX in the wake of this week’s events, a person familiar with the matter told the outlet.
“Besides Sequoia, dozens of others backed FTX’s rise, including Ontario Teachers’ Pension Plan, SoftBank Group Corp., a venture-capital arm of Samsung Electronics Co., Dan Loeb’s Third Point LLC, Tiger Global and football star Tom Brady,” the Wall Street Journal writes. “Sequoia said in a letter to fund investors it ran a ‘rigorous diligence process’ on FTX and its loss was small in the context of a fund with billions of dollars of profits. ‘We are in the business of taking risk,’ the firm said.” A spokesman for FTX declined to comment to the outlet.
Twitter reacted live as Musk addressed Twitter employees in an all-hands meeting. Reporter Michelle Ghoussoub:
Writer Megan Farokhmanesh:
That’s all for today — thank you so much for joining us! Make sure to tell others to subscribe to The Technology 202 here. Have a good weekend!
