Microsoft Corporation has agreed to pay USD $250 million to settle a class action lawsuit filed in 2022 by a Swedish pension fund that sought to block the company’s USD $69 billion acquisition of game publisher Activision Blizzard. The settlement resolves claims brought by Sjunde AP-Fonden AP7, a pension fund based in Sweden, which argued that the acquisition would harm competition in the video game industry.
The lawsuit, filed in a U.S. federal court, alleged that Microsoft’s purchase of Activision Blizzard would give the technology giant an unfair advantage in the markets for game consoles, subscription services, and cloud gaming. The plaintiffs contended that the merger would concentrate too much power in Microsoft’s hands, potentially stifling innovation and raising prices for consumers.
Background of the Case
The 2022 class action was one of several legal challenges Microsoft faced following its announcement of the Activision Blizzard acquisition. Sjunde AP-Fonden AP7, which managed pension assets for Swedish workers, was the lead plaintiff in the case. The fund argued that Microsoft’s ownership of popular game franchises such as Call of Duty, World of Warcraft, and Candy Crush would allow the company to leverage those titles to dominate competing platforms.
Microsoft completed the acquisition of Activision Blizzard in October 2023, after overcoming regulatory hurdles in the United States, the United Kingdom, and the European Union. The company agreed to concessions with regulators, including licensing agreements for Call of Duty to rivals like Nintendo and Nvidia, and commitments not to make Activision Blizzard content exclusive to its own Xbox ecosystem.
Settlement Terms
Under the settlement agreement, Microsoft will pay USD $250 million to the class of shareholders who held stock in Activision Blizzard before the merger was finalized. The payment is intended to compensate investors who claimed they suffered financial losses due to the uncertainty and alleged anti-competitive nature of the deal.
The settlement avoids a potentially lengthy and costly trial. Microsoft did not admit any wrongdoing or liability as part of the agreement. The company stated that the settlement was in the best interests of all parties and allowed the business to move forward without further distraction.
Reactions and Implications
Legal observers noted that the settlement amount is relatively small compared to the overall value of the deal. The USD $250 million figure represents a fraction of the acquisition price, which was one of the largest in technology history. Some analysts viewed the settlement as a pragmatic decision to resolve litigation that could have dragged on for years.
The case highlights ongoing scrutiny of large technology acquisitions, particularly those involving content that has broad consumer appeal. Regulators and class action plaintiffs have increasingly focused on how mega-mergers in the gaming and entertainment sectors affect market competition.
Shareholder Impact
Shareholders who held Activision Blizzard stock between January 18, 2022, and April 27, 2022, the period covered by the lawsuit, will be eligible for compensation. The exact distribution formula will be determined by the court during the approval process.
A hearing to approve the settlement is expected to be scheduled in the coming months. If approved, the fund will be distributed to qualifying shareholders after the deduction of legal fees and administrative costs.
Next Steps
Microsoft and the plaintiffs’ attorneys are expected to submit the settlement agreement for court approval within 30 days. The court will then review the terms to ensure they are fair, reasonable, and adequate for the class. If approved, notifications will be sent to eligible shareholders with instructions on how to file claims.
The settlement does not affect other ongoing legal proceedings related to the acquisition, including a separate case brought by the Federal Trade Commission in the United States. That matter is currently pending before an administrative law judge.
Source: GamesIndustry.biz
