Sunday 18 August 2019 1:18 pm

McAfee sues Dixons Carphone over alleged breach of software contract

Cybersecurity firm McAfee has sued Dixons Carphone over claims the retailer breached a contract to promote its software and instead marketed products made by one of its rivals.

McAfee has alleged that Dixons failed to honour an agreement to exclusively promote its products in its stores, which it said will cost the company more than £30m in lost sales.

Read more: Dixons Carphone executives delay bonuses

The US anti-virus software manufacturer, which is owned by TPG Capital and Intel, said it signed a four-year deal with the electronics retail chain, which is set to expire in April 2021.

McAfee has also claimed that Dixons signed a deal with rival cybersecurity firm Symantec, promoting its software to customers as an add-on purchase.

In a company memo, Dixons told staff to “ensure all McAfee anti-virus products are only displayed in the McAfee software bay and nowhere else,” according to the Sunday Times, which first reported the dispute.

The contract issue arose due to a possible incompatibility of McAfee’s products with Microsoft Windows 10S. However, the software firm argued this did not justify Dixons’s alleged move to stop promoting its products.

In a ruling earlier this month, the High Court granted an interim injunction requiring the retailer to continue promoting McAfee’s software.

Sophie Eyre, partner at law firm Bird & Bird, described the ruling as an “unusual decision”.

“The court is often reluctant to order that one side perform positive obligations contained in a contract, but in making the order the court acknowledged that the upcoming trial would be expedited and therefore the part of the order requiring the defendant to act ‘positively’ would be for a relatively short period,” she said.

The lawsuit comes during a challenging period for Dixons, which reported a pre-tax loss of £259m in its latest financial year.

The retailer blamed the figures on changes in the UK mobile market, and boss Alex Baldcock warned investors of “more pain” in the coming year. Shares in Dixons have dropped almost a fifth in the last six months.

Read more: Dixons Carphone shares plunge further as hefty loss rattles investors

Dixons Carphone has been ordered to pay £100,000 in costs, and has until the end of the week to submit its defence.

Dixons said it was unable to comment on an ongoing legal case. McAfee has been contacted for comment.

Main image credit: Getty