The British competition watchdog believes that the deal raises competition concerns as the two firms are close rivals and have few other significant competitors
Avast’s acquisition by NortonLifeLock continues to be under UK CMA’s scanner. (Credit: JiriMatejicek/Wikipedia.org)
The UK Competition and Markets Authority (CMA) said that it may refer NortonLifeLock’s $8.6bn acquisition of Avast for an in-depth investigation after a phase 1 probe showed that the deal could reduce competition in Britain.
The British competition regulator had launched the phase 1 investigation into the deal in January 2022. It concluded that the deal raises competition concerns as NortonLifeLock and Avast are close competitors and have few other significant competitors.
Both firms cater to consumers with cyber safety software under a range of different brands. Their products are antivirus software or endpoint security software, privacy software such as virtual private networks (VPNs), and identity protection software.
The CMA said that the transaction between the two firms if completed could result in UK consumers getting a worse deal when searching for cyber safety software in the future.
CMA Executive Director David Stewart 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.”
The CMA has given five working days for NortonLifeLock and Avast to submit remedies to address its competition concerns. The competition watchdog would then have five more working days to consider whether to accept any remedy instead of launching an in-depth phase 2 probe into the deal.
NortonLifeLock is headquartered in the US, while Avast is based in the Czech Republic. Their cash-cum-stock deal was announced last August.
The deal had been proposed to be executed via a UK court-sanctioned scheme of arrangement.
The combination of NortonLifeLock and Avast is expected to create a major player in the consumer cyber safety business.