European regulators are looking closely at Intel's planned McAfee acquisition and may hold up the deal with an investigation.
According to a report published in The Wall Street Journal, which cited unnamed sources, the European Union is concerned about Intel's plans to embed security features directly into its microprocessors.
Intel supplies the bulk of the world's PC chips, and the EU is concerned that if McAfee has "privileged access" to the security features it could put other security vendors at an unfair disadvantage, the Journal said.
The EU's antitrust regulator has "privately expressed concerns" about the deal during its preliminary review and could decide to subject it to a more in-depth examination, the Journal said.
Intel spokesman Chuck Mulloy declined to comment beyond saying that Intel is "continuing to work with regulators as they conduct their reviews".
A McAfee spokesman pointed to an update on the merger status McAfee posted to its website, which makes no reference to any concerns at the EU.
"We are happy to announce that all required pre-close regulatory filings around the world have been made and the matter is now under review in those respective jurisdictions," the statement says. "We expect that the deal will close some time in the first half of 2011 but do not have any further details to share at this time."
An in-depth merger review can hold up a big acquisition by several months. The EU had competitive concerns about Oracle's acquisition of Sun, and Oracle had to wait four months after the EU began its investigation to close the deal.
When Intel announced the $7.7bn acquisition, it said it expected to close the deal in the first quarter of next year, or even by the end of 2010, the Journal noted. A statement on Intel's website says it now hopes to close the deal in the first half of 2011, the Journal reported.