Microsoft has consented to a $250 million payment to resolve a lawsuit concerning its acquisition of Activision Blizzard

A legal dispute involving Microsoft and its $69 billion purchase of Activision Blizzard has led the tech company to agree to pay $250 million. This settlement resolves a class action from 2022 initiated by the Swedish pension fund Sjunde AP-Fonden AP7, which sought to obstruct the acquisition.

Accusations from the lawsuit suggested that CEO Bobby Kotick expedited the acquisition process unjustly, depriving shareholders of the opportunity to receive more than $95 a share. Microsoft and Kotick refuted these claims, citing the desire to avoid litigation diversions, while the pension fund accepted the settlement as equitable.

The preliminary agreement, subject to approval by Delaware's Court of Chancery, outlines that 40% of the payment is to be shouldered by Microsoft and 60% by directors' insurance, affecting about 30 cents per share of Activision Blizzard.

Microsoft's legal stance included a denial of allegations regarding misconduct at Activision, claiming there was no wide-reaching issue ignored by senior executives or the Board, including Kotick.

"Microsoft does not substantiate any allegations that there has been systemic or widespread workplace misconduct at Activision; that Activision senior executives ignored, condoned, or tolerated a culture of systemic harassment, retaliation, or discrimination; or that Activision’s Board of Directors, including its CEO, Kotick, acted improperly with regard to the handling of any instances of workplace misconduct."

Kotick suggested that the legal action was indirectly associated with the Swedish conglomerate Embracer, pointing to AP7's executive Emma Ihre's connections to Embracer. His legal counsel described the suit as an attempt to inhibit Activision's game development, favoring Embracer’s game sales.

Embracer refuted these allegations, asserting there was no collaborative effort with AP7 regarding Kotick's statements and no directives passed through Ihre to AP7.

As part of the settlement discourse, AP7 revealed the California Civil Rights Department had not confirmed the claims in its earlier suit regarding sexual misconduct and discrimination at Activision Blizzard. This original lawsuit reference was partly based on media portrayals, which the CRD clarified had been unvalidated.

"No court or any independent investigation has substantiated any allegations that: there has been systemic or widespread sexual harassment at Activision Blizzard [or] that Activision Blizzard senior executives ignored, condoned, or tolerated a culture of systemic harassment, retaliation, or discrimination."

The acquisition was finalized in October 2023, post-examination by the UK's Competition and Markets Authority.