The Federal Trade Commission is reportedly seeking an injunction to prevent Microsoft Corp.’s acquisition of Activision Blizzard Inc. from closing. 

CNBC reported the FTC’s plans today, citing a person familiar with the matter.

Activision Blizzard is one of the world’s largest video game developers. Last quarter, it generated $2.38 billion in revenue from an installed base of 368 million monthly active users. About a year earlier, Microsoft inked a deal to acquire the company for $68.7 billion.

The terms of the deal reportedly specify a July 18 completion deadline. According to CNBC, the injunction the FTC is preparing to file would prevent the transaction from completing by that date. The agency is currently pursuing an antitrust lawsuit to block Microsoft from buying Activision Blizzard and the first hearing is scheduled for August.

In its lawsuit, the FTC argues that the deal would negatively impact the video game console market. Activision Blizzard currently makes its games available on Microsoft’s Xbox console series as well as a number of competing systems. The FTC charges that, in the event the acquisition goes through, Microsoft could stop offering Activision Blizzard content on rivals’ systems.

The agency argues the deal would also harm the software giant’s rivals in the cloud gaming market. Microsoft competes in that market with its Xbox Cloud Gaming service. According to the FTC, the company may limit the availability of Activision Blizzard content on rival services.

The case is set to go before the FTC’s internal administrative law judge in August. If the judge blocks the deal, Microsoft could reportedly file an appeal and ask the agency’s commission to vote on the matter. Should the commission also rule against the company, it will have the option to take the case to a federal court.

“We welcome the opportunity to present our case in federal court,” Microsoft President Brad Smith said in a statement today. “We believe accelerating the legal process in the U.S. will ultimately bring more choice and competition to the market.”

The development comes less than two months after the U.K.’s antitrust regulator decided to block the Activision Blizzard deal. The Competition and Markets Authority, or CMA, believes the acquisition would harm Microsoft’s competitors in the cloud gaming market. Microsoft has proposed a series of antitrust commitments to address the CMA’s concerns, but officials deemed them insufficient.

The European Union, in contrast, has accepted Microsoft’s antitrust commitments. The European Commission, the European Union’s executive branch, signed off on the deal last month. The decision was made after Microsoft offered to make Activist Blizzard content available to rival cloud gaming providers through a 10-year licensing agreement.

Image: Microsoft