The Federal Trade Commission (FTC) is bringing back its lawsuit challenging Microsoft's (MSFT) $69 billion acquisition of video game giant Activision Blizzard (ATVI). The revived challenge, which the FTC filed Wednesday and is moving forward through the commission's administrative court, comes after the UK's Competition and Markets Authority (CMA) indicated it is close to approving the acquisition.
The FTC’s challenge is the last major hurdle keeping Microsoft from putting the deal in its rearview mirror.
"The Commission has determined that the public interest warrants that this matter be resolved fully and expeditiously. Therefore, the Commission is returning this matter to adjudication," the FTC's filing states.
The agency originally pulled back its administrative challenge in July after losing a lawsuit requesting that it be granted a preliminary injunction to block Microsoft from closing the deal. At that point, the CMA, which originally ruled to block the deal, stood as the only potential roadblock to completing the transaction.
However, last week UK regulators, who agreed to consider a revised deal, completed a review of Microsoft’s revised proposal and said they were mostly persuaded by concessions from Microsoft that include ceding Activision's European cloud gaming business to French company Ubisoft.
Now, Microsoft's takeover of the "Call of Duty” publisher is again in limbo as the FTC is preparing for another round with the Xbox maker. While the company can close the acquisition, the FTC can still challenge the legality of the tie-up, after the fact.
The commission said it will kick off its administrative challenge to the merger 21 days after the Ninth Circuit Court of Appeals rules on the agency's challenge to the lower court’s decision to deny its injunction request.
“The FTC continues to believe this deal is a threat to competition and we are placing this matter on the Commission’s Part 3 calendar ahead of our ongoing federal court appeal, but our current focus is on the federal appeal process,” FTC spokesperson Victoria Graham told Yahoo Finance in a statement.
Microsoft says it will nonetheless plan to close the deal by Oct. 18.
"We still anticipate that we will close the transaction by October 18, and we have full confidence in our case and the deal's benefits to gamers and competition," a Microsoft spokesperson told Yahoo Finance.
If Microsoft overcomes the FTC's challenge and absorbs Activision Blizzard, it will become the third largest video game company by revenue behind Tencent and Sony.
The crux of the FTC's argument revolves around the still-nascent cloud gaming industry. Microsoft is a leader in the space thanks to its Xbox Cloud Gaming platform, which it offers through its GamePass gaming subscription.
By adding Activision Blizzard's "Call of Duty" and other popular titles to the service, the FTC argues, Microsoft could make it too difficult for rivals like Sony (SONY) and Nintendo (NTDOY) to compete in the space. Microsoft, however, has signed agreements with both companies, as well as other cloud gaming services from the likes of Nvidia (NVDA), saying that it will provide "Call of Duty" on their platforms for the next 10 years.