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Merger between Norton and Avast paused over competition concerns

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A potential merger between cyber-security firms Avast and NortonLifeLock has been put on hold by the Competition and Markets Authority (CMA) over concerns it could see a drop in competition.

The US-based NortonLifeLock had been planning to purchase UK firm Avast for £6bn but the CMA is now considering an “in-depth investigation” into the merger before the transaction is allowed to continue.

Both firms offer cyber safety software to consumers under a variety of different brands. Products include antivirus software (also known as endpoint security software), privacy software (such as VPNs) and identity protection software.

As the companies are close competitors, with few other significant rivals, the CMA said it was concerned that if completed, the proposed deal could lead to a reduction in competition in the UK market.

This could lead to UK consumers getting a worse deal when looking for cyber safety software in the future, it added.

David Stewart, CMA executive director, said: “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.

“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 and Avast now have five working days to submit proposals to address the CMA’s competition concerns. The CMA then has a further five working days to consider whether to accept any offer instead of referring the case for an in-depth phase 2 investigation.

Last month it emerged that the UK’s cyber-security sector exceeded £10bn in revenue for the first time according to government figures.

The CMA has been cracking down on tech firms in recent months. In February, Nvidia cancelled plans to purchase ARM due to “significant” regulatory scrutiny, and Google was also forced to make changes to its proposed privacy sandbox in its Chrome browser to stop the firm from pushing out third party advertisers.

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