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NortonLifeLock and Avast merger could reduce competition, CMA warns

The watchdog will launch a phase two investigation into the merger unless NortonLifeLock and Avast address its concerns within five days

NortonLifeLock logo on smartphone with Avast logo in background

NortonLifeLock’s merging with Avast could reduce competition in the UK antivirus software market due to a shortage of other significant rivals, potentially leaving consumers with worse deals.

That's according to UK’s Competition Market Authority (CMA), which on Wednesday described the two merging companies as “close competitors”. Both NortonLifeLock and Avast develop and distribute consumer-oriented antivirus software platforms as well as utilities such as virtual private networks (VPNs), password managers, and device performance tuning tools.

CMA executive director David Stewart said that the watchdog will launch an “in-depth phase two investigation” into the merger if the two companies don’t offer “a clear-cut solution” addressing the concerns within the next five days.

“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,” said Stewart.

NortonLifeLock described the CMA’s decision as “surprising”, adding that the company “remains confident that the transaction should be approved”.

“We believe this transaction can only benefit consumers across the globe, including in the UK, through increased innovation and greater consumer freedom and choice beyond big tech platform providers in the burgeoning Cyber Safety market," a spokesperson told IT Pro.

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"Regulators from across the globe, including the US Department of Justice, and in Europe the German Federal Cartel Office, and the Spanish National Markets and Competition Commission, have reviewed and cleared the transaction."

NortonLifeLock “will continue to constructively engage with the CMA and their review” and has delayed the finalisation of the merger to “mid-to-late 2022” – months after the original deadline of 24 February 2022.

Formerly known as Symantec, NortonLifeLock rebranded after selling its enterprise security business to Broadcom in 2019. In July 2021, NortonLifeLock and Avast were reported to be engaging in advanced talks over a potential merger, with the two companies confirming the deal in August ahead of the UK takeover code deadline.

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