A watchdog group in the industry has suggested that the judge assigned to make the final decision on Microsoft’s bid of $68.7 billion to acquire Activision Blizzard should disqualify herself because Microsoft employs her son.
THE RED DRAGON tweeted:
Watchdog group calls on judge to recuse herself in FTC-Microsoft Xbox / Activision case due to the fact her son is working for Microsoft. Says may violate judicial ethics standards
– The Washington Post https://t.co/Ds9ffnsVdr
— THE RED DRAGON (@TWTHEREDDRAGON) June 29, 2023
U.S. District Judge Jacqueline Scott Corley disclosed this familial connection during last week’s preliminary conference. Although Corley mentioned that her son works in a different department unrelated to gaming, the watchdog group argues that the proximity to the company still presents an obvious conflict of interest.
In a letter obtained by The Washington Post, The Revolving Door Project asserts that Corley’s son’s employment at Microsoft may violate several rules outlined in the Code of Conduct for US Judges, including one that advises judges to avoid any impropriety or the appearance of impropriety in all their activities.
The group warns that such a potential conflict of interest could influence the judge’s impartiality and erode public trust in the judicial system.
The Revolving Door Project states, “The public could rightfully become concerned about a judge being improperly biased if the judge’s child is employed by a corporation whose case the judge oversees. It is common sense that a parent would want to support the financial success of their child’s employer to support their child’s financial stability and professional prestige.”
Judge Corley and The Northwest District of California did not respond to Gizmodo’s request for comment.
Currently, Corley is presiding over hearings to determine whether the Federal Trade Commission’s (FTC) request to temporarily halt the merger until the trial scheduled for August should be granted. If Corley decides against the temporary halt, the deal could be finalized before the July 18 deadline.
The Revolving Door Project contends that Corley’s son’s employment at Microsoft introduces “a clear risk of retaliation.” The group alleges that Microsoft could respond to an unfavorable ruling by terminating Corley’s son’s employment or creating obstacles that hinder his career advancement.
They cite Microsoft’s recent wave of layoffs as evidence, suggesting that the company could conveniently use it as a pretext to justify retaliatory firing. According to the group, the mere possibility of such a scenario, akin to the TV show “Succession,” could create a crisis of incentives.
Microsoft and Activision Blizzard did not respond to Gizmodo’s request for comment. The FTC declined to comment.
The Revolving Door Project argues that the judge’s son’s employment necessitates recusal, even if he is not directly involved in the gaming division, due to the high stakes involved in the merger.
The letter cites Microsoft’s lead lawyer, who stated last week that an adverse ruling in the merger case could lead to a “three-year administrative nightmare.”
The group claims that such upheaval could reignite concerns about layoffs affecting various divisions within the company. Additionally, if the merger falls through, Microsoft could potentially be required to pay $3 billion in breakup fees to Activision.
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A letter has been received during a critical juncture in one of the costliest tech acquisitions ever. The acquisition in question faced rejection by the United Kingdom’s Competition and Markets Authority, which argued that it would reduce the choices available to gamers.
On the contrary, the European Commission approved the buyout after conducting an investigation. However, the Federal Trade Commission (FTC), under the guidance of its assertive chairperson Lina Khan, cautions that the merger could grant Microsoft the ability to stifle competitors in both its Xbox gaming console and its expanding cloud gaming enterprise.