Lawmakers Express "Serious Concerns" Over Saudi-Led Electronic Arts Acquisition

A group of 46 House Democrats has formally requested the Federal Trade Commission to investigate the proposed Saudi-led buyout of Electronic Arts. The lawmakers are concerned that the deal, which would leave the company $20 billion in debt, could lead to significant layoffs and harm to workers.

I have seen the video game industry face a lot of instability recently, and the proposed $55 billion buyout of Electronic Arts by a Saudi-led consortium has only added to the uncertainty. A group of over 40 House Democrats in signing a letter to the Federal Trade Commission, urging a thorough investigation into the deal. They have expressed serious concerns about the potential for this acquisition to harm workers and violate anti-trust laws.

The letter, organized by the Labor Caucus, highlights the precarious position of workers in the video game industry, who are already dealing with layoffs and shrinking opportunities. EA is a major employer in the U.S. video game sector, and there are worries that the company already has significant power in setting wages. The lawmakers point to a "steep decline in median worker pay year-over-year" at EA and the elimination of over 1,700 U.S. jobs since 2023 as evidence of a labor market where employers can impose unfavorable conditions without facing consequences. The debt-financed nature of the acquisition, which would leave the new entity owing banks $20 billion, is seen as a strong incentive for further cost-cutting measures like layoffs and studio closures.

“We are committed to preserving fair, competitive labor markets and safeguarding American jobs, and given the impact of this acquisition on workers, labor market concentration, and the long-term competitiveness of the U.S. video game industry, we urge you to thoroughly review this transaction.”

— the lawmakers wrote.

The concerns extend beyond just labor issues. The buyers, which include Saudi Arabia’s Public Investment Fund, private equity firm Silver Lake, and Jared Kushner's Affinity Partners, have extensive ownership stakes across sports leagues, sports-betting platforms, and game-development tools. This raises red flags about potential anti-competitive practices. The lawmakers worry that the combined entity could restrict worker mobility and reduce bargaining power for employees throughout the industry. There are also anxieties that Saudi Arabia's authoritarian rulers could impose their values on EA's games, potentially impacting the inclusivity of titles like The Sims. The Sims' inclusivity is a hallmark of the franchise, and any threat to that would be a significant loss. This concern is particularly potent given the country's record on anti-LGBTQ+ regulations and human rights in Saudi Arabia. Some have even suggested that studios like BioWare, known for their diverse storytelling, could be at risk.

This is not the first time this deal has faced scrutiny. Senators Richard Blumenthal and Elizabeth Warren have previously raised concerns about national security risks, suggesting that Saudi Arabia could use EA's consumer data for surveillance and propaganda. While some argue that many U.S. companies already produce content favorable to the U.S. military, the prospect of a foreign power wielding such influence is unsettling. The broader concern is that Saudi Arabia is using these acquisitions to distract from its human rights record. It is a complex situation with many moving parts, and I will be watching closely to see how the FTC responds to these calls for investigation.

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