Activision Blizzard fined $35 million because of not disclosing Immortal Loot boxes

Activision Blizzard has agreed to pay $35 million to resolve allegations from the Securities and Exchange Commission that it "failed to maintain disclosure controls and procedures to ensure that the company could assess whether its disclosures pertaining to its workforce were adequate." The settlement also addresses allegations that Activision Blizzard violated laws governing whistleblower protection. Without acknowledging or disputing the allegations, the corporation is settling them.


"The SEC's order finds that Activision Blizzard failed to implement necessary controls to collect and review employee complaints about workplace misconduct, which left it without the means to determine whether larger issues existed that needed to be disclosed to investors," said Jason Burt, director of the SEC's Denver regional office.

Higher-ups at Activision Blizzard lacked the knowledge necessary to fully understand the nature and volume of workplace misconduct complaints between 2018 and 2021, according to the order, because the company "lacked controls and procedures among its separate business units to collect and analyze employee complaints of workplace misconduct."

Activision Blizzard allegedly demanded that former employees notify it if the SEC contacted them for information, and the SEC found that the business violated a whistleblower protection rule as a result of separation agreements it executed between 2016 and 2021.

Burt, one of the investigation's supervisors, stated that taking steps to prevent former employees from speaking with the Commission staff directly about a potential securities law violation is not just poor corporate governance, but also unlawful.

"We are happy to have settled this issue amicably. We did so as part of our continuing commitment to operational excellence and transparency, as the order acknowledges, and we updated our separation contract language and disclosure procedures," according to an Activision Blizzard spokesperson in a statement to Engadget. Activision Blizzard has faith in the workplace disclosures it makes.

According to sources at the time, the government began looking into Activision Blizzard about these issues around September 2021. The California Department of Fair Employment and Housing (DFEH) sued the business two months prior over claims of pervasive sexual harassment and systemic gender discrimination.

The SEC investigation focused on Activision Blizzard's handling of complaints about these kinds of situations. In order to ensure that concerns were thoroughly documented and effectively communicated to senior management and the legal team, it claims that the corporation altered its procedures for resolving complaints between 2020 and last year. Activision Blizzard committed in June of last year to publish an annual report detailing how it responds to accusations of sexual harassment and gender discrimination and what steps it takes to avoid such occurrences.

Microsoft announced its intention to acquire Activision Blizzard for $68.7 billion in January 2022. To stop the acquisition attempt, the Federal Trade Commission has filed a lawsuit. Regulators in the UK and the EU are also looking closely at the impending merger.