The U.S. Federal Trade Commission (FTC) has withdrawn its case seeking to impede Microsoft's $69 billion acquisition of game developer and publisher Activision Blizzard.
The agency had adopted a dual-strategy approach to challenge the proposed acquisition.
The first, in the district court, failed to obtain a preliminary injunction against the transaction last week. An appeal for a pause on the deal was also dismissed.
The second approach was through a trial on August 2 before an FTC administrative law judge. FTC Secretary April Tabor ordered a pause on this leg of the case on Thursday.
Microsoft and Activision argued in a motion displayed on the FTC's website that the withdrawal of the agency's case was both compulsory and beneficial to the public.
"The district court had a full opportunity to consider the FTC’s claims and found that the Commission was unlikely to succeed on the merits of those claims for multiple, independently sufficient reasons," the companies said in the motion.
In January 2022, Microsoft announced it would acquire Activision Blizzard, the video game publisher behind popular franchises like Call of Duty, World of Warcraft, and Candy Crush Saga.
The deal would be the largest acquisition in Microsoft's history. It is expected to close before the end of this year after the two companies extended the timeline to finalize the merger by October.
The merger has been met with mixed reactions, with regulators worldwide concerned that Microsoft will use its new dominant position to stifle competition.
European, U.S., and U.K. regulators have investigated the Microsoft-Activision deal over the past months.