I haven't followed the story closely but from the headlines I gathered that AVG are touted as the honest guys telling us as it is, while everyone else does it but hides in legal gobbledygook. So dumping AVG and switching to a competitor might not solve the underlying problem.
But it does sound like AVG have shot themselves in the foot, as naturally a lot of people are going to drop them now. Then everyone else will learn that honesty doesn't pay in this business, and things settle back as they were...
As I had to do a clean Windows install recently, I lost AVG in the process and have just gone with MS Security Essentials instead, as it got installed by the Windows updates more or less automatically. Well, we know that MS is also entering into the private data collection game, so I don't know if MSE is any better in that regard.
What I can say though that scanning files with MSE is way faster than it was with AVG. Generally my 5-yr system is pretty snappy, I don't know how much of that can be put down to not having reinstalled AVG (or maybe it's just the effect of the clean install).