After receiving a green light from the EU, the US Federal Trade Commission has further complicated Microsoft’s proposed $69 billion takeover of game publisher Activision Blizzard by arguing in a federal court that the deal should be blocked.

Speaking during the government’s opening arguments on the first day of a five-day evidentiary hearing on the deal, FTC lawyer James Weingarten argued: "If this deal is completed, the combined company ... is likely to have the ability, an incentive, to harm competition in various markets related to consoles, subscription services and the cloud (for gaming)."

The FTC has argued that it needs a judge to block the deal until its in-house court gets to rule on the merger. The watchdog has also said that the merger would give Microsoft exclusive access to Activision games – something which Microsoft denies, having pledged to continue distributing titles like Call of Duty and Diablo on major platforms.

The FTC had previously claimed that the largest tech takeover in history would give Microsoft the “ability and increased incentive to withhold or degrade Activision’s content in ways that substantially lessen competition."

In Microsoft’s opening arguments, the company’s lawyer Beth Wilkinson said: "I think you will see that every piece of evidence shows that it only makes sense for Xbox to make these Activision games available to as many people on as many platforms as possible."

The lawyer also claimed that a court-ordered injunction could lead to a three-year administrative proceeding which would effectively kill the deal.

Microsoft Gaming chief exec Phil Spencer will testify today, along with senior Microsoft finance director Jamie Lawver. Dov Zimring, the former director of product management for Google's defunct Stadia cloud gaming service will also testify, while Sony Interactive Entertainment chief exec Jim Ryan – whose company has openly campaigned to block the takeover – will appear by video deposition.

Satya Nadella and Bobby Kotick, the chief executive officers of Microsoft and Activision Blizzard respectively, are the highest-profile witnesses listed for next week. The hearing is scheduled to proceed through to 29 June.

The UK’s Competition and Markets Authority (CMA) previously blocked the deal on the grounds that it would give Microsoft an effective monopoly in the growing cloud gaming market. Both companies have appealed the decision, and have criticised it as setting a bad precedent for the UK’s tech industry.

The European Commission meanwhile has endorsed the deal, and referred to the tie-up as “pro-competitive”.

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