British cybersecurity company Avast will close the Jumpshot analytics business at the centre of a data privacy scandal, it said on Thursday, putting hundreds of jobs at risk and deepening a slide in its shares.
Avast allegedly collected data on what many of its users did online and sent it to Jumpshot, which then offered to sell the information to clients, media reports said this week. Avast denied the allegations and began a review on Wednesday.
Its shares were at the bottom of Britain's midcap index on Thursday after falling as much as 9 percent, taking Avast's losses to 25 percent for the week so far, as it said it would take a charge of $15-$25 million in 2020 in wind-down costs.
Jumpshot, which Avast started in 2015, analyses consumers' online habits by measuring their search, click and buy patterns across thousands of categories from over 150 websites, including Amazon, Google, Netflix, and Walmart, its website shows.
Jumpshot and Avast have acted "fully within legal bounds", Avast Chief Executive Officer Ondrej Vlcek said in a blog post, adding both companies were committed to full compliance with GDPR, Europe's rules on data protection.
Scrutiny of data-handling has risen as consumers become more aware of how their online activity is used by businesses and authorities scurry to strengthen regulations.
"Protecting people is Avast's top priority and must be embedded in everything we do in our business and in our products. Anything to the contrary is unacceptable," Vlcek said.
The decision to close Jumpshot was taken because the business does not fit into Avast's priorities for 2020 and beyond, he said, adding it would affect "hundreds" of employees.
Avast said it had cut Jumpshot's access to its data with immediate effect as it winds down the operation.
It did not give details on its plans for Jumpshot's management and employees, or what jobs it could cut. Avast did not immediately respond to a request for comment.
San Francisco-headquartered Jumpshot has five global offices and is led by a team of six, headed by Deren Baker.
The closure will not affect Avast's 2019 results, it said in a trading update, while forecasting mid-single digit growth in underlying revenue for the current year, excluding Jumpshot.
Avast's shares, which listed on the London Stock Exchange in 2018, had recovered some losses to trade 7.9 percent lower at 419.8 pence as of 1013 GMT.
© Thomson Reuters 2020