TechCrunch+

The all-electric Volkswagen ID 7 sedan — the next EV in the German automaker’s lineup — was unveiled Tuesday at CES 2023 in Las Vegas.

And the most exciting part of the debut wasn’t the vehicle’s multi-layered explosion of yellow, orange, red and blue camouflaged electroluminescent paint that lights up on command. (although it is eye-catching for the near-production version of the vehicle). Instead, it was a few features and changes from its previous ID models that showed VW is trying to up its software and human-machine interface design game with an approach that is closer to what consumers might find in Tesla models, the Porsche Taycan and the Rivian R1S and Rivian R1T.

The ID 7 sedan, previously shown as a concept vehicle in China under the name ID Aero, is one of 10 new electric models that will into production by 2026, according to Volkswagen Passenger Cars CEO Thomas Schäfer. The EV will launch in China, Europe and North America.

Like its other ID siblings, the ID 7 is based on the MEB platform, a flexible modular system — really a matrix of common parts — that VW Group brands including Audi, Seat, Skoda and Volkswagen use to improve the efficiency and cost-effectiveness of producing EVs. The Volkswagen ID.3, an electric hatchback that is only sold in Europe and the Volkswagen ID.4 SUVandID.5, along with various variants of the Audi Q4 e-tron are built on the MEB platform. By 2025, the automaker expects more than 80% will be.

The ID 7 does have a few standout changes and features worth noting, starting with a new interface on the car’s infotainment system. The central display is larger at 15 inches. But more importantly, the way users will access and interact with the functions located on the screen, has changed.

The climate functions are now prominently and permanently displayed on the bottom of the central infotainment screen. Along the top and upper left is where the driver and quickly access information on the vehicle and advanced driver assistance features.

In what promises to be controversial in some automotive circles, VW has adopted a new air conditioning system that uses digitally controlled air vents similar to what Tesla vehicles are equipped with. That means no more physical air vents that a driver or passenger can move to change the direction of air flow. Instead, users can access voice controls or the central touchscreen to change the direction of the air flow.

The air conditioning system is also designed to be more intuitive. If a driver approaches the vehicle with their key, the system should turn on and begin cooling the interior on hot days or heat it when the temperature is colder.

Volkswagen is also trying to step up its natural language processing game. The company said users will be able to give specific verbals cues, like Hello Volkswagen, my hands are cold!,” and the system will respond by starting the steering wheel heating function and directing warm air to the driver’s hands.

Other additions and changes featured in the ID 7 includes an augmented reality head-up display and illuminated touch sliders on the bottom of the touchscreen.

The exterior design does fit within the current EV portfolio at VW. The sedan has an aerodynamic front section and roof that has a coupe-like slope to the rear. The design, which can be difficult to discern amid the illuminated multi-colored camouflage, is designed to both help to reduce energy consumption and increase the range, according to the company. Air intakes are located in the front end, to guide the air through them and down the sides of the vehicle to the rear, forming an air curtain, which calms the air flow at the sides of the vehicle.

The end result is an estimated range (under the European ELTP cycle) of around 700 kilometers, or about 434 miles of range.

The Volkswagen all-electric ID 7 sedan’s most interesting feature isn’t its light-up paint by Kirsten Korosec originally published on TechCrunch

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And we’re back! Well, just me for now anyway. Haje is covering CES, so if you are there, seek him out and say “Hi!” Thanks so much to Henry for conducting the Daily Crunch train last week. It was a joy to read it and hope you enjoyed it, too. It looks like we are back at it with a long list of news, so let’s get started. — Christine

The TechCrunch Top 3

It’s hard to pull the wool over Reddit users’ eyes: If you have an out-of-warranty Apple iPhone, iPad or MacBook, you might want to join Reddit. Users spotted, and quickly circulated, a change in the repair pages for those devices that stated battery replacement service charges would increase by up to $50 for these devices, Ivan reports.
Sit, Bonk, sit…good dog: Newly launched dog coin Bonk is being credited as having contributed to a spike in Solana’s price. The cryptocurrency’s prices had been volatile lately, Jacquelyn writes, following the whole FTX debacle.
TikTok forms its own “Adults Only” room: An ability to restrict TikTok livestreams to adult viewers is now something the social media giant is making available to creators for short-form videos, Aisha reports.

Startups and VC

Can co-CEOs work? If you’re a company with two founders looking for that advice, Becca and Darrell have a good Found podcast for you. This time they were joined by Brex co-founder and co-CEO Henrique Dubugras, who talked about not only the company’s corporate credit card and expense management startup, but also about what made him and his co-founder, Pedro Franceschi, decide to be co-CEOs.

And we have three more for you:

If 2022 were a headline…: Natasha M, Mary Ann and Alex solicited answers to that question and compiled a list of how you described the tech industry’s 2022.
Sharing economy, but for hospital rooms: HD is a Southeast Asia startup betting that matching demand with supply can also apply to vacant hospital rooms. Rita has more on how the company is doing this.
BharatPe CEO is out: Manish reports that BharatPe CEO Suhail Sameer plans to leave the India-based fintech at the end of the week. Though CFO Nalin Negi will jump into the role as interim CEO, the company is already on shaky ground: BharatPe sent its founder packing last year after it was discovered he was allegedly misusing company funds.

How to make the most of your startup’s big fundraising moment

No matter the size, early-stage investments are a sign of validation for any startup.

However, “when you see other companies raising hundreds of millions of dollars, it can be easy to think no one will be interested in hearing about your startup’s much smaller round,” writes Hum Capital CMO Scott Brown.

In this marketing playbook for early-stage startups, Brown explains how founders can use fundraising announcements to maximize media interest, comply with SEC guidelines and align more closely with investors to “get the most bang for their buck.”

One more from the TC+ team:

Greener pastures: Could climate be a safe investment right now? It seems so. Tim spoke to Union Square Ventures about its new $200 million fund and shares what USV plans to do in 2023.

TechCrunch+ is our membership program that helps founders and startup teams get ahead of the pack. You can sign up here. Use code “DC” for a 15% discount on an annual subscription!

Big Tech Inc.

If you were hoping for some Nvidia news today, boy, have we got you covered. Romain, Rebecca and Brian listened in on a CES virtual press conference so you didn’t have to. Some highlights include a lot of Nvidia’s tools going into cars: Mercedes will use Nvidia’s digital twin tech to modernize its factories, Foxconn’s EVs will be built with Nvidia’s self-driving toolkit, and Hyundai, BYD and Polestar are among carmakers that will use the company for its in-car gaming features. Meanwhile, Nvidia’s robot simulator adds human coworkers and Nvidia upgrades GeForce Now with RTX 4080 performance for premium users.

And we have five more for you:

One for all and all for unionizing: Microsoft now has its first official union in the U.S., Amanda writes. At ZeniMax, a gaming studio it owns, 300 quality assurance testers voted to unionize, something she notes is becoming a trend in the gaming industry.
Hackers came knocking: The LockBit ransomware gang is claiming responsibility for a ransomware attack on the Housing Authority of the City of Los Angeles, Carly reports. HACLA provides affordable housing for over 19,000 people in the city.
Show pony: Ingrid writes about Intel’s new high-end 13th-gen 24-core processors and its new CES strategy. For all of your CES news, stay tuned to TechCrunch’s dedicated CES event page throughout the conference, ending January 8.
To infinity and beyond: Aria has your look at the space industry trends for 2023. Spoiler, this year will be bigger than 2022.
Tesla ran out of gas while delivering vehicles in Q4: Rebecca writes about Tesla delivering 405,278 vehicles in the fourth quarter, which came in at nearly 5% below Wall Street expectations.

Daily Crunch: Reddit users discover Apple is raising its battery replacement service fees by Christine Hall originally published on TechCrunch

During the lull between last Christmas and New Year’s, New York State became one of the first in the country to enact a “right to repair” law — albeit with amended language that some advocates say make the law toothless. Called the Digital Fair Repair Act and set to go into effect on July 1, New York’s regulation requires manufacturers to provide owners and independent repair shops the manuals, parts, diagnostics and diagrams necessary to repair consumer devices.

Which devices does the Digital Fair Repair Act cover, exactly? Well, a lot — any that constitute as “digital electronic equipment,” basically. But there are some carve-outs, including cars, home appliances, medical devices, off-road equipment and enterprise devices used by data centers, schools and hospitals.

The legislation only applies to gadgets manufactured after July 1, moreover, and it doesn’t require manufacturers to volunteer any security unlocking codes needed to repair a device. It also lets those same manufacturers decline to deliver specific components if they think “the risk of improper installation heightens the risk of injury.”

The bulk of those exceptions were added at the eleventh hour with the approval of Governor Kathy Hochul, who said in a statement that they’re intended to lessen the risk of security issues and physical harm while making repairs. Advocates like Louis Rossman, however, who runs a MacBook repair shop, expressed immediate skepticism, arguing that manufacturers will exploit the amendments to their own ends.

Representatives for Microsoft and Apple pressed Hochul’s office for changes, Ars Technica reported last year. So did industry association TechNet, which represents tech companies including Amazon, Google and TechCrunch parent Yahoo! The previous version of the bill received wide bipartisan support, passing the New York state assembly 147-2 and the senate 59-4, but sat on the governor’s desk for months.

“Such changes could limit the benefits for school computers and most products currently in use,” Public Interest Research Groups, a collective of consumer rights organizations, told Engadget in a statement last week. “Even more troubling, the bill now excludes certain smartphone circuit boards from parts the manufacturers are required to sell, and requires repair shops to post unwieldy warranty language.”

Rossman points out that under the Digital Fair Repair Act, companies like Apple will still be allowed to serialize components after a repair, preventing independent repairers from repairing devices with spare parts — even genuine parts removed from the same product. “[The] manufacturer will tell you that when you have a bad $28 chip on your motherboard that what you need to do is replace the $745 Motherboard,” he said in a video response to the law’s passage.

The Digital Fair Repair Act is among a raft of bills recently introduced in more than 40 states that aim to expand repair options for consumer devices. Supporters of the legislation say that a lack of documentation, poor spare parts access and software restrictions are limiting consumer choice. Manufacturers counter that authorized repairs are necessary to ensure quality and protect their intellectual property.

New York’s right-to-repair bill has major carve-outs for manufacturers by Kyle Wiggers originally published on TechCrunch

At the start of the year, a new law went into effect in Louisiana, which requires online publishers to conduct age verification checks if their site’s content is more than 33.3% pornography.

In accordance with this law, Pornhub now requires visitors to verify their age with the LA Wallet app, a digital wallet for Louisiana state drivers licenses. Other popular adult websites haven’t instituted age checks yet, according to Motherboard. But per the new law, porn sites can be sued for damages that result from a minor’s access to such content. TechCrunch reached out to Pornhub for comment.

“Due to advances in technology, the universal availability of the internet, and limited age verification requirements, minors are exposed to pornography earlier in age,” the legislation says. “Pornography contributes to the hyper-sexualization of teens and prepubescent children and may lead to low self-esteem, body image disorders, an increase in problematic sexual activity at younger ages, and increased desire among adolescents to engage in risky sexual behavior.”

This legislation was authored by Representative Laurie Schlegel (R-LA), who also advocated for legislation that made it illegal for transgender teens to participate school sports in accordance with their gender identity. Before taking office in 2021, Schlegel worked as a sex addiction counselor.

A sex worker, professor, and research fellow at UCLA’s Center for Critical Internet Inquiry, Olivia Snow describes these age verification checks as part of a “sex panic.” Even though this legislation states that sites that conduct age verification cannot retain identifying information, Snow believes that porn consumers may still fear data breaches, which is a very valid concern.

Websites like PornHub and OnlyFans require performers to prove their age and identity as a way of cracking down on nonconsensual content and child sexual abuse material (CSAM). But if consumers are required to hand over legal documents in order to watch porn, they might seek out other sites, where the content might not be as well-vetted.

“It’s really just further marginalizing sex workers, which I think is going to be the primary effect,” Snow told TechCrunch. “I imagine this means that there will be an increased black market of premium content that’s non-consensually disseminated.”

Legislation like Louisiana’s Act 440, as well as SESTA/FOSTA, are positioned as advocating for children’s safety. But in practice, this legislation usually just makes it more difficult for sex workers to do their jobs safely. Plus, in some cases, these laws have actually made it more difficult for law enforcement to curb sex trafficking.

In 2018, the Department of Justice’s seized Backpage.com, which sex workers used as a tool to help them vet in-person clients. When the site was shut down for money laundering and sex trafficking, Indiana police said that it became more difficult for them to catch people running sex trafficking operations.

Snow says Act 440 “is likely to also have an effect similar to that of Backpage coming down, which is, you know, just sex workers losing another stream of income and having to resort to less protected avenues.”

In 2020, Senator Elizabeth Warren (D-MA) proposed a study to the Senate on the secondary effects of SESTA/FOSTA on sex workers.

“Sex workers have reported a reduced ability to screen potential clients for safety, and negotiate for boundaries such as condom use, resulting in reports of physical and sexual violence,” the bill says. “Many sex workers have turned to street-based work, which has historically involved higher rates of violence than other forms of transactional sex.”

Snow describes the act of requiring people to upload their ID to watch porn as surveillance. In the most extreme cases, she says this kind of surveillance can harm LGBTQ populations.

“As homophobia and transphobia — especially homophobia in the context of porn — is rising, I could totally see the state zeroing in on people consuming gay porn, or lesbian porn, and either surveilling them further or criminalizing that,” she said. In the text of Act 440, the bill warns that pornography can inspire “deviant sexual arousal,” but does not define what “deviant” means.

“Trans women are disproportionately represented in sex work,” said Snow. “I don’t know if that’s a conscious decision for lawmakers, or if that’s just circumstantial, but I think trans women sex workers, as usual, will be the most affected.”

For years, the U.K. government has been working on an online safety bill, which has been in limbo due to continual leadership changes. As it stands, the bill could institute similar age checks that would require users to verify their age before accessing sexually explicit content.

In the past, the U.K. government has tried to enforce age checks on porn sites, but dropped the plan in 2019 due to concerns about the technical and regulatory challenges of mandating age verification, as well as privacy concerns. Now, age checks in the U.K. are up for consideration once again.

In any case, we won’t be surprised if a bunch of Louisiana residents suddenly express interest in learning how to use a VPN.

You must now verify your drivers license to watch Pornhub in Louisiana by Amanda Silberling originally published on TechCrunch

FTX founder and former CEO Sam Bankman-Fried plead not guilty to all eight counts of U.S. criminal charges on Tuesday.

Bankman-Fried appeared before a judge in the U.S. District Court in New York City on Tuesday with his lawyers, Mark Cohen and Christian Everdell. Criminal charges against the 30-year-old former billionaire include wire fraud, conspiracy to commit money laundering and conspiracy to misuse customer funds, among others. The former FTX CEO is also facing suits by the SEC and CFTC over similar charges.

Prior to the announcement, Bankman-Fried was expected to plead not guilty. This decision could turn into a lengthy legal battle, and he could face up to 115 years in jail if convicted on all charges. His trial date has been set to October 2, 2023.

In late December, FTX co-founder and former CTO Gary Wang and Alameda Research CEO Caroline Ellison both plead guilty to federal criminal charges in relation to the FTX collapse. The two are also facing civil penalties from the SEC and CFTC alongside the criminal charges. Wang and Ellison plan to cooperate with prosecutors and will be major witnesses given their close ties to both Bankman-Fried and FTX and its affiliated crypto hedge fund Alameda.

Last month, a U.S. judge released Bankman-Fried on a $250 million bail bond after he was extradited to America from the Bahamas. The bail package allowed Bankman-Fried to remain under house arrest at his parents’ home in Palo Alto, California.

Bankman-Fried’s lawyers also filed a letter to the Manhattan federal court on Tuesday seeking redactions of the names of two individuals who intend to help secure his multi-million dollar bail in attempts to protect them from public attention.

The lawyers argued there’s no need for public disclosure after his parents “have in recent weeks become the target of intense media scrutiny, harassment, and threats. Among other things, Mr. Bankman-Fried’s parents have received a steady stream of threatening correspondence, including communications expressing a desire that they suffer physical harm.”

SBF’s representation argued there is, accordingly, “serious cause for concern” for additional retaliation for others involved in the bond.

It has been a little under two months since the once-major crypto exchange FTX filed for Chapter 11 bankruptcy and Bankman-Fried stepped down as CEO, only to be replaced by Enron turnaround veteran John J. Ray III.

On December 13, the U.S. House Financial Services Committee held its first hearing focused on FTX’s collapse. Ray sat as the only witness for the hearing as Bankman-Fried, who was originally scheduled to testify, was unable to join after being arrested in the Bahamas.

During the four-hour hearing, Ray’s testimony addressed a number of aspects in the situation from the extent to which customer funds were misused, to internal operations – or lack thereof.

When asked if FTX had significant risk management systems, Ray said at the time, “there were virtually no internal controls and no separateness whatsoever.”

Later in the hearing, Ray disclosed that there was no board overseeing FTX, aside from Bankman-Fried. FTX, once valued at $32 billion, didn’t have an accounting or human resources department. It did, however, have a legal department and employees with compliance titles — but no department for them to call home.

As it stands, Bankman-Fried’s plea is a risky move as he diverts from his former colleagues who plead guilty. In general, many crypto community members view Bankman-Fried’s attitude as cocky – given the media tour he went on before being arrested where he appeared on networks from Good Morning America to platforms as niche as crypto-focused Twitter spaces.

This is a developing story and may be updated.

Former FTX CEO SBF pleads not guilty to U.S. criminal charges by Jacquelyn Melinek originally published on TechCrunch

Welcome back toEquity, the podcast about the business of startups, where we unpack the numbers and nuance behind the headlines. As promised, I’m taking over Equity Monday for the beginning of this year as Alex is out on paternity leave. Big hugs to his growing family!

We’re starting the year with big post-PTO energy, because there’s no other way I know how to do it. Here’s what we chatted:

Tesla missing expectations, Meta doing its let’s-just-acquire-smart-talent thing, and a debut in the S&P 500 that caught my attention.
A big idea that is running around over at Matrix. TC’s Paul Sawers looks into how messaging apps may become more interoperable thanks to a fascinating new protocol. To me, this screams the ideas of decentralization from crypto last year, but with a more understandable pitch. Catch me Slacking you on WhatsApp!
Finally, we end with a look ahead at CES this week. We have reporters on the ground catching the moonshots, and we’ll have updates for you with the full crew on Friday!

More to come! You can follow me on Twitter@nmasc_or on Instagram@natashathereporter.

Equity drops at 10 a.m. PT every Monday and at 7 a.m. PT on Wednesdays and Fridays, so subscribe to us on Apple Podcasts,Overcast,Spotifyandall the casts. TechCrunch also has agreat show on crypto, ashow that interviews founders, one thatdetails how our stories come together, and more!

Remember how this whole working thing works? by Natasha Mascarenhas originally published on TechCrunch

The massive valuations and funding rounds of 2021 left some room for optimism around the state of the Israeli cybersecurity industry in 2022, instilling a sense of security in Q1 of the new year. While other sectors began to feel the shifting tides of the market as the year progressed, capital continued to freely flow into cybersecurity, further reinforcing the belief that it is a persistently resilient outlier in tech, immune to market instabilities and unable to be shocked into a downturn.

After closing the book on 2022 this week, it is safe to say that this optimism was somewhat misguided. With hindsight, 2021 can be categorized as an anomaly that sent the industry into a tailspin, with bloated valuations exceeding actual revenue and funding rounds scaling at what many warned was an unhealthy pace. The repercussions of this spiral are evident in our 2022 analysis of funding and M&A data for the Israeli cybersecurity ecosystem.

In 2022, overall funding for Israeli cybersecurity startups fell by a dramatic 64%, from $8.84 billion in 2021 to $3.22 billion this year, and the number of funding rounds decreased from 135 in 2021 to 94. When compared to overall funding in 2020 ($2.75 billion over 109 funding rounds), it seems that 2021 was a blip on the radar, and that the industry is returning to where it left off in 2020.

Early stage gets the funding

Our data indicate that the majority of capital that did flow into cybersecurity this year poured directly into one very distinct area: seed rounds of early-stage cybersecurity startups. The average 2022 seed round actually shattered the 2021 record ($7 million), reaching a whopping $9 million. In total, seed funding rose by 65% this year, from $233 million in 2021 to $384 million in 2022.

This striking amount of capital, dedicated to the earliest stages of company building, demonstrates ongoing investor confidence in the cybersecurity industry’s potential to innovate and build solutions for increasingly acute threats.

Furthermore, it indicates the difficulty in raising Series A rounds this year, as investors’ thresholds for these rounds grew in light of the economic crisis. While the number of Series A rounds remained almost unchanged since 2021 (30 rounds last year and 24 rounds in 2022), investors preferred to support the seed rounds of startups that will grow sustainably and cautiously from the get-go.

“Investors understand that seed funding has a clear baseline, as the costs of building a company have not decreased,” says Iren Reznikov, director of Corporate Development and Ventures at Sentinel One. “They know that building a company from the ground up and ensuring that it reaches its Series A round with maximum maturity while hitting all of its benchmarks, costs money. At the same time, investors expect founding teams to set clear goals for reaching their Series A and strive to reach product-market fit at an early stage by engaging with prospective customers faster.”

This confidence is shared by cybersecurity founders, who, despite this year’s market volatility, still believe in the potential to build something meaningful for enterprise protection and business continuity. “Early-stage startups are best poised to respond to the changing needs of a fiscally constrained market,” says Slavik Markovich, co-founder and CEO of Descope, a stealth startup building a service for application developers in the authentication space.

“A tight economy is usually accompanied by increased fraud and cyber attacks. User adoption and conversion have become even more critical in this market, with businesses looking for solutions that reduce friction for their end customers in order to prevent any sources of churn. Founding teams at early-stage companies that focus on solving these problems will continue to attract investor interest.”

Return of the cyberveterans

How well did Israel’s cybersecurity industry do in 2022? by Walter Thompson originally published on TechCrunch

The Housing Authority of the City of Los Angeles, or HACLA, has confirmed it is investigating a cybersecurity incident shortly after the LockBit ransomware gang claimed responsibility for a cyberattack on the agency.

HACLA, which provides affordable housing to more than 19,000 low-income families across Los Angeles, was added to LockBit’s dark web leak site on December 31. The listing, seen by TechCrunch, claims that LockBit has stolen 15 terabytes of data from the housing agency.

Screenshots posted by the cybercriminals suggest the data includes the personal details of people who sought housing assistance from the city, as well as data from the city agency’s payroll, human resources, and accountancy files.

In a statement given to TechCrunch, HACLA spokesperson Courtney Gladney declined to comment on specifics, but said that HACLA is experiencing “a cyber event” that resulted in “disruption” to the agency’s systems.

“We are working diligently with third-party specialists to investigate the source of this disruption, confirm its impact on our systems, and to restore full functionality securely to our environment as soon as possible,” the spokesperson said. “We remain committed to providing quality work as we continue to resolve this issue.”

At the time of publication, HACLA’s website appears to be operational but has not yet publicly acknowledged the cyber incident on its website or social media.

LockBit’s claimed attack on HACLA marks the second major cyberattack on a Los Angeles city agency in recent months. In September, the Los Angeles Unified School District — the second-largest school district in the U.S. — was hit by the Russian-speaking Vice Society ransomware group. The gang later published hundreds of gigabytes of data stolen during the attack, including passport details, Social Security numbers, health information, and psychological assessments of students.

LockBit, meanwhile, is one of the more prolific ransomware gangs, with claimed attacks on tech manufacturer Foxconn, U.K. health service vendor Advanced and IT giant Accenture. In November, a dual Canadian-Russian citizen was charged for their alleged participation with the ransomware gang.

Hackers claim ransomware attack on Los Angeles housing authority by Carly Page originally published on TechCrunch

Welcome back to Found, where we get the stories behind the startups.

This week Darrell and Becca are joined by Brex co-founder and co-CEO Henrique Dubugras to chat about his corporate credit card and expense management startup. Henrique talked about what made him and his co-founder (Pedro Franceschi) decide to launch the company and why the friends, who met online as teenagers, decided to be co-CEOs. Henrique also talks about how Brex navigated changes at the startup this year, and how he personally handled layoffs, all while Darrell and Becca do a questionable job of hiding their disdain for Brex’s legacy competitor.

Subscribe to Found to hear more stories from founders each week.

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Via email: found@techcrunch.com

Two CEOs is better than one with Henrique Dubugras from Brex by Rebecca Szkutak originally published on TechCrunch

At ZeniMax, a Microsoft-owned gaming studio, 300 quality assurance (QA) testers have voted to unionize. This marks Microsoft’s first official union in the U.S., as well as the biggest gaming union in the country.

Union organizing has been on the rise in the video game industry, particularly among QA workers. In 2022, QA testers at Activision Blizzard have successfully formed unions at Raven SoftwareandBlizzard Albanythrough the Communication Workers Alliance (CWA), which will also represent ZeniMax’s union. But while Activision Blizzard has attempted tostall union organizingat every turn, Microsoftpledged in June that it would not stand in the way of employee organizing. So, by earning a majority of votes in favor of unionization, Microsoft will officially recognize ZeniMax Workers United, according to the CWA. Microsoft has not yet responded to a request for comment.

“Microsoft has lived up to its commitment to its workers and let them decide for themselves whether they want a union,” said Communications Workers of America President Chris Shelton in a statement. “Other video game and tech giants have made a conscious choice to attack, undermine, and demoralize their own employees when they join together to form a union. Microsoft is charting a different course which will strengthen its corporate culture and ability to serve its customers and should serve as a model for the industry and as a blueprint for regulators.”

ZeniMax includes subsidiaries like Bethesda Softworks and id Software, which produce franchises like The Elder Scrolls, Doom and Fallout.

Zachary Armstrong, a senior quality assurance tester II at id Software, told TechCrunch last month that the unit is organizing to fight for better pay and conditions.

“QA testers are consistently placed at the bottom of the totem pole when it comes to game development, to the point that we’re not even considered game developers.” Armstrong said. QA workers rigorously test all facets of video games to identify and resolve problems that impact user experience. “That’s reflected in our pay, and that’s reflected in our work, especially with regard to crunch.”

In the lead up to deadlines, QA testers may be expected to work unsustainable hours to get a game ready for public eyes — this is referred to as “crunch.” The QA testers who unionized at Activision Blizzard have also raised concerns about the expectations of crunch time. Before announcing their intent to unionize, the Raven Software QA testers went on strike to protest layoffs affecting 12 contractors — before those contracts were terminated, the QA testers had been working overtime for five weeks straight.

The next step for the union at ZeniMax is to negotiate their contract with Microsoft.

“Before us is an opportunity to make big changes and bring equity to the video game industry,” said Victoria Banos, a senior QA audio tester, in a statement. “We want to put an end to sudden periods of crunch, unfair pay, and lack of growth opportunities within the company. Our union will push for truly competitive pay, better communication between management and workers, a clear path for those that want to progress their career, and more.”

Microsoft now has its first official union in the U.S. by Amanda Silberling originally published on TechCrunch