The US Federal Trade Commission official on Thursday withdrew the agency's case before an in-house judge that sought to block Microsoft's $69 billion acquisition of game-maker Activision.

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The agency has been pursuing a two-pronged attack against the proposed transaction. One was in district court, which refused last week to slap a preliminary injunction on the proposed transaction. An appeals court also turned down a request for the deal to be paused.

The second was before an FTC administrative law judge, where the deal was set to go to trial on Aug. 2. It was this attack that the agency put on hold on Thursday, in an order made by FTC Secretary April Tabor.

Microsoft and Activision argued in a motion posted to the FTC's website on Wednesday that withdrawing the agency's case was both mandatory and in the public interest.

"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 their motion.

(Edited by : Asmita Pant)