Skip to main content
  1. Home
  2. Gaming
  3. News

New York City sues Activision Blizzard over Microsoft deal

Cristina Alexander
By

Activision Blizzard is now in even more legal trouble than before. New York City has sued the Call of Duty and World of Warcraft publisher over the acquisition deal it made with Microsoft in January.

According to Axios, which broke the news, the lawsuit was filed in Delaware by the New York City Employees’ Retirement System (a pension fund for the city’s firefighters, police officers and teachers) on April 26, and the public version of the complaint was shared on May 2.

Related Videos

The group alleges in the complaint that CEO Bobby Kotick only rushed the $70 billion sale of Activision Blizzard to Microsoft in order for him and the board of directors “to escape liability and accountability entirely” for the sexual misconduct and gender discrimination that took place at the company, which caused its stocks to plummet. When Microsoft agreed to buy the company for $95 per share, they say it devalued the stock even further. The discrimination allegations are the subject of an ongoing lawsuit filed by California’s Department of Fair Employment and Housing in July 2021.

Related

“Given Kotick’s personal responsibility and liability for Activision’s broken workplace, it should’ve been clear to the board that he was unfit to negotiate a sale of the company,” the complaint reads. “Not only did the merger offer Kotick and his fellow directors a means to escape liability for their egregious breaches of fiduciary duty, but it also offered Kotick the chance to realize substantial non-ratable benefits.”

New York demanded Activision Blizzard send a list of documents and other materials related to the sale, including information on five potential buyers and board memos. The city said has also been pressing the company for internal documents since last fall to find out the extent of Kotick’s knowledge about Activision Blizzard’s “frat boy culture” of sexual harassment and abuse during his tenure, which The Wall Street Journal reported about in November.

Editors' Recommendations

Topics
Microsoft will recognize Activision Blizzard unions under labor neutrality agreement
Attendees walk past the Microsoft logo during the Web Summit in Lisbon.

Microsoft announced on Monday that it will formally recognize any unions organized by employees of Activision Blizzard after entering into a breakthrough labor neutrality agreement with the Communication Workers of America (CWA), the union said. The agreement will apply to Activision Blizzard employees 60 days after Microsoft's $68.7 billion acquisition closes.

In accordance with the agreement, employees will be able to join a union without interference from Microsoft, nor Activision Blizzard. Chris Shelton, president of the CWA, said that the union expressed concerns about Microsoft's acquisition of the Call of Duty and World of Warcraft publisher given the ongoing sexual harassment and discrimination lawsuit filed against Activision Blizzard by California's Department of Fair Employment and Housing (DFEH), as well as its own lawsuit against the company accusing it of worker intimidation and union-busting. Now, he says the union fully supports the deal and looks forward to working with Microsoft once the deal closes.

Read more
Microsoft plans to recognize Call of Duty devs’ new union
Phil Spencer on stage at E3 2019.

Xbox CEO Phil Spencer said that Microsoft will recognize Raven Software's union once its nearly $69 billion acquisition of Activision Blizzard closes next year.

According to a report from Kotaku, Spencer held an internal Microsoft meeting on Thursday where he addressed some of the statements he made about game workers' unions at last year's meeting when he mentioned that he lacked experience with them. Today, he said that he took the time to learn more about the organization efforts of game developers across the industry and gave a welcoming statement of support for them.

Read more
Call of Duty workers vote to unionize in industry first
The Blizzard Entertainment booth at Chinajoy China Digital Interactive Entertainment Expo.

Quality assurance (QA) testers at Activision Blizzard subsidiary Raven Software have formed a union after an official vote. The vote was 19-3 in favor of formation, creating the first union of its kind at a AAA developer.

Digital Trends observed the Call of Duty: Warzone developer’s ballot count digitally: 28 people were eligible to vote, although only 24 voted. Two votes were challenged and made invalid. Still, 19-3 was enough to ensure the vote was in favor of unionization.

Read more