The Irish arm of US computer virus protection group Norton LifeLock has been hit with legal action by the UK’s competition watchdog after it allegedly refused to provide certain information as part of an investigation into auto-renewing contracts.
The Competition and Markets Authority (CMA) said it was the first time it has ever had to take a company to court to seek information in a consumer protection case.
The UK unit of NortonLifeLock is also targeted in the court action by the CMA, which began its probe into the anti-virus software sector in 2018.
“During its investigation into the anti-virus software sector, the Competition and Markets Authority has identified a number of important concerns that Norton's terms and practices for automatically renewing contracts could result in customers paying for services they no longer want or need,” noted the authority yesterday.
It added that in order to progress its case on the basis of relevant evidence, the authority requested information from Norton, including research undertaken by the software firm on how customers responded to website information on auto-renewal and pricing.
“Norton has refused to provide some of this information,” it said.
The CMA said it considers Norton’s non-compliance to be in breach of its legal obligations and, for the first time ever on a consumer protection case, will use its powers to enforce the request for information through the courts.
“"It is completely unacceptable that a leading anti-virus software firm has refused to supply all the information we asked for, which is why we're taking the firm to court,” said CMA chief executive Andrea Coscelli.
“Our unprecedented decision in this case reflects the serious impact of Norton's refusal, which is delaying a CMA investigation intended to protect UK consumers,” she added.
The Irish unit of Norton LifeLock, formerly known as Symantec, posted revenue of €1bn in the 12 months to the end of March 2019, the most recent year for which accounts are publicly available for the division. It made a pre-tax profit of €32.3m.
In auto-renewal contracts, a contract is automatically renewed at the end of a set time period for a further period. Customers have to actively take steps to cancel the auto-renewal, because their payment details are kept on file to facilitate it.
The CMA is investigating if Norton provides sufficiently clear or prominent information that a contract will automatically renew, both before the customer enters into the contract and then before it automatically renews.
It’s also examining if Norton provides customers with adequate ways to cancel the automatic renewal, and if it uses price promotions that present a regular introductory price as a sale price.
The CMA is also looking at whether Norton uses unfair contract terms to increase the prices paid by customers when contracts automatically renew.
NortonLifeLock said it takes the CMA’s claims seriously and is cooperating with the probe.
It said it remains confident that its business practices and terms and conditions are “fair and compliant” with UK consumer law.