Activision dips on report FTC is likely to challenge Microsoft’s acquisition (NASDAQ:ATVI)

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Activision Blizzard (NASDAQ:ATVI) is 3.6% lower postmarket alongside a holiday eve report that the Federal Trade Commission is likely to file an antitrust lawsuit to block its $69B acquisition by Microsoft (NASDAQ:MSFT).

The FTC hasn’t yet voted out a complaint or even meet with company lawyers, but its staff reviewing the deal are skeptical of the companies arguments for the transaction, Politico reports.

That comes as much of the “heavy lifting” in the probe is done – including depositions of Microsoft chief Satya Nadella and Activision CEO Bobby Kotick – even if the investigation isn’t over, according to the report.

And if the FTC does proceed with a suit it could come as soon as next month.

Objections to the merger have primarily come from Microsoft’s console rival Sony (NYSE:SONY), which says it would be hurt significantly if Microsoft decided to make Activision best-sellers like Call of Duty exclusive to the Xbox – though the FTC’s concerns range beyond that, especially to the developing cloud gaming market.

Sony was reported to have met with Europe’s antitrust regulator about the proposed transaction in September, and Microsoft responded to that opposition with complaints in October.

Meanwhile, China’s “normal procedure” review of the deal may be nigh.