After a little more than a year that Microsoft and Activision Blizzard agreed on both merging by having its gaming studios joining Xbox Game Studio, the Federal Trade Commission or simply the FTC, the federal agency that regulates businesses across the United State and is the entity that looks for preventing monopoly, ash finally said something official.

Contrary to the general belief that the FTC was leaning to conditionate an approval for Microsoft buying Activision Blizzard, the agency confirmed that it did not and sued Microsoft to prevent the purchase.

FTC believes that closing the transaction would not only give Microsoft an upper hand in the console market, but also in other areas such as subscription gaming and cloud gaming.

Of course, the previous big purchase for Xbox done by Microsoft, being ZeniMax and the umbrella of gaming studios under Bethesda was brought as an example on how Microsoft suppressed competition.

“Microsoft decided to make several of Bethesda’s titles, including Starfield and Redfall, Microsoft exclusives despite assurances it had given to European antitrust authorities that it had no incentive to withhold games from rival consoles.”

Indirectly, the FTC aligned with Sony’s claims that Microsoft will gain an unfair competitive advantage by franchises like Call Of Duty, one of the biggest revenue drivers of all the gaming industry, being theirs.

Activision and Microsoft responds

The first reaction was an investor letter that was revealed by news outlet where Activision Blizzard CEO wrote to their shareholders and employes:

“Team,

I wanted to provide a brief update on our pending merger with Microsoft. This week the U.S. Federal Trade Commission (FTC) announced its decision to challenge the deal. This means they will file a lawsuit to block the merger, and arguments will be heard by a judge.

This sounds alarming, so I want to reinforce my confidence that this deal will close. The allegation that this deal is anti-competitive doesn't align with the facts, and we believe we’ll win this challenge.

Thanks to the hard work by all of you every day, we’re on a strong path, bringing epic joy to players around the world with what I believe are the greatest games in the industry. At the same time, the competitive landscape is shifting, and, simply put, a combined Microsoft-ABK will be good for players, good for employees, good for competition and good for the industry. Our players want choice, and this gives them exactly that. You can read more about the specifics on those points in this update we recently shared with you.

We believe these arguments will win despite a regulatory environment focused on ideology and misconceptions about the tech industry.

Thank you for your dedication and creativity.

Bobby”

Microsoft on his part, went more publicly and reacted to the legal challenge via its president Brad Smith on Twitter:

Originally the Department Of Justice was not interested in interfering in a strange maneuver, leaving the scrutiny of the transaction completely to the FTC and now, it is Microsoft’s task to convince the court that owning Activision Blizzard and many of its successful IP doesn’t mean competition strangulation.

I foresee that if Microsoft can convince the court to be allowed on closing the transaction, probably concessions will be required and some already have been a homework that Microsoft did already agreeing with Valve and Nintendo, committing that Call OF Duty will be available on Steam and Nintendo Switch for the next 10 years.