The UK’s Competition and Markets Authority (CMA) has expressed concern over NortonLifeLock’s intention to purchase cybersecurity company, Avast.
NortonLifeLock Inc announced an agreement to purchase freemium software pioneer Avast for between $8.1bn and $8.6bn in August 2021. The CMA subsequently launched a phase one investigation into the cash-and-stock acquisition.
In a statement released Wednesday, the competition watchdog said it had found that the proposed deal could negatively impact UK consumers seeking to purchase cybersecurity software.
NortonLifeLock, headquartered in Tempe, Arizona, and Avast, headquartered in Prague, Czech Republic, both offer cybersecurity products including antivirus software, identity protection software and privacy software to consumers under a variety of different brands.
“As the companies are close competitors, with few other significant rivals, the Competition and Markets Authority (CMA) is concerned that if completed the proposed deal could lead to a reduction in competition in the UK market,” said the CMA.
“This could lead to UK consumers getting a worse deal when looking for cyber safety software in the future.”
NortonLifeLock and Avast now have five working days to submit proposals addressing CMA’s competition concerns. The CMA then has a further five working days to consider whether to accept an offer by the companies or refer the case for a second in-depth investigation.
“We are living more of our lives online and it is vital that people have access to competitive cyber safety software when seeking to protect themselves and their families,” said CMA executive director David Stewart.
“NortonLifeLock’s proposed purchase of Avast could lead to a reduction in competition in the UK and ultimately a worse deal for consumers when looking for cyber safety software. Unless the companies can offer a clear-cut solution to address our concerns, we intend to carry out an in-depth phase 2 investigation.”
NortonLifeLock said on Wednesday that the CMA’s finding was “surprising” and that it had no intention of proposing any ‘Phase 1’ remedies.
The deal is now expected to close in mid-to-late 2022.