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FTC could appeal Microsoft-Activision ruling as soon as Wednesday

FTC Chairwoman Lina Khan testifies during the House Energy and Commerce Subcommittee on Innovation, Data, and Commerce hearing on the “FY2024 Federal Trade Commission Budget,” in Rayburn Building on Tuesday, April 18, 2023.

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The Federal Trade Commission could appeal a judge’s decision against its attempt to block Microsoft and Activision Blizzard from closing their $68.7 billion deal as soon as Wednesday, a source familiar with the matter confirmed to CNBC.

Bloomberg first reported that the agency was leaning toward an appeal after U.S. District Judge Jacqueline Scott Corley denied the FTC’s request for a preliminary injunction. If it had been granted, the parties would not have been able to close their deal until the FTC’s internal administrative proceeding played out later this summer, past the July 18 deal deadline.

The FTC has not reached a final decision on appealing, according to the source, who was not authorized to speak publicly on internal discussions. But the temporary restraining order that prevents Microsoft and Activision from closing will expire after 11:59 p.m. PT on Friday. The FTC declined to comment.

Even if it appeals, the agency will be racing against the clock of the deal deadline until the court acts. The parties are still dealing with opposition from the U.K.’s Competition and Markets Authority, but that agency agreed on Tuesday following the ruling in the U.S. to stay the litigation in order to consider proposals to restructure the deal that may assuage its concerns.

A Microsoft spokesperson referred CNBC to an earlier statement from Microsoft Vice Chair and President Brad Smith, who said they “hope other jurisdictions will continue working towards a timely resolution. As we’ve demonstrated consistently throughout this process, we are committed to working creatively and collaboratively to address regulatory concerns.”

CNBC’s Steve Kovach contributed to this report.

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