Videogame giant Activision Blizzard is set to pay around $50 million to settle a lawsuit by a California regulator, a US news report said Friday.

In 2021, California's Civil Rights Department sued the company, claiming leaders ignored staff complaints involving sexual harassment and discrimination.

The lawsuit had a part in spurring Microsoft's acquisition of the company, noted the Wall Street Journal report.

The settlement of about $50 million—the Journal reported citing unnamed sources—would be the second biggest by the agency if completed.

Activision has pushed back on the state's allegations.

The Journal reported that the state previously pegged Activision's liability at close to $1 billion, to 2,500 staff who could have claims against the firm.

In February, an announcement said Activision agreed to pay $35 million to settle charges from a US securities regulator, over its disclosure policies on workplace harassment complaints.

The Securities and Exchange Commission had determined that between 2018 and 2021, Activision lacked procedures "to collect and analyze employee complaints of workplace misconduct."

In October, Microsoft closed its blockbuster acquisition of Activision, whose video games include "Call of Duty" and "Candy Crush." This sealed one of the biggest technology tie-ups in history, after final hurdles were overcome.

Microsoft launched its takeover in January last year, aimed at making it the world's third-largest gaming company by revenue, but it faced strong headwinds from regulators.

© 2023 AFP