US Congress Wants The FTC To Dive Deep Into The $55 Billion EA Sale To Saudi Arabia
The United States government has decided to take a break from its usual schedule to peek over the fence at the video game industry, and for once, it isn't about violence in video games.
I generally try to keep my expectations low when it comes to governments understanding the tech world, but this specific move is interesting. The Congressional Labor Caucus has officially asked the Federal Trade Commission (FTC) to take a closer look at the pending sale of Electronic Arts (EA) to the Saudi Arabia Public Investment Fund (PIF).
Over 40 lawmakers signed a letter to FTC Chair Andrew Ferguson, raising flags about what this deal actually means for the people who build the games. I am not going to pretend this will definitely stop a $55 billion train from leaving the station, but the arguments they are using are actually relevant to anyone who works in this industry.
THE LABOR CAUCUS HAS QUESTIONS
The main point of the letter isn't about national security or content censorship. It is about jobs. The Labor Caucus chairs explicitly stated they have "serious concerns" regarding the sale and its impact on the American labor market.
The letter points out that workers in the video game industry are already dealing with "instability, shrinking opportunities, and repeated rounds of layoffs". Since EA is one of the biggest employers in the field, the lawmakers argue that the company already has enough power to set wages. They are worried that handing them over to a new owner with this specific financial structure is just asking for trouble.
THE BILLION DOLLAR DEBT PROBLEM
This is the part that actually caught my attention. The lawmakers aren't just using buzzwords; they are looking at the balance sheet. The deal includes adding roughly $20 billion in debt to EA after the sale.
Common sense tells you that when a company takes on that much debt, they have to pay for it somehow. The letter argues that the new owners would be "incentivized to hold more layoffs" to recoup that money. It also suggests this could lead to more offshoring, restructuring, and studio closures.
The fear is that these moves would jeopardize thousands of high-skilled jobs and further concentrate the market for artists, engineers, and testers. Basically, they are asking if this deal is going to result in a gutted workforce just to balance the books.
APPlYING THE FTC'S OWN RULES
The group is basing this request on the FTC's 2023 merger guidelines. These rules state that any merger which harms workers or allows firms to reduce labor demand "may violate antitrust laws".
Because the deal is valued at a staggering $55 billion, the lawmakers feel that extra scrutiny is mandatory to protect workers. They want the FTC to investigate EA's wage-setting power and the likelihood of post-transaction layoffs before giving this the green light.
You can read the full text of their concerns in the Labor Caucus letter here.
I’ll believe it when I see it, but it is at least refreshing to see someone in Washington reading the fine print on these mega-mergers. Whether it actually changes anything is another story entirely.
