The Biden administration in US on Thursday revealed plans to ban the sale of antivirus software made by Russia's Kaspersky Lab in the United States, citing significant national security risks.
Commerce Secretary Gina Raimondo highlighted concerns that Russian influence over Kaspersky could enable the software to steal sensitive information or install malware on American computers. This decision comes amidst ongoing efforts to thwart potential Russian cyberattacks and ramp up pressure on Moscow as the conflict in Ukraine continues.
The administration's decision leverages broad powers established during the Trump era, aimed at restricting transactions with tech companies from adversarial nations like Russia and China. Raimondo stressed that the move was essential to prevent adversaries from gaining access to US networks and devices.
Democratic Senator Mark Warner, chair of the Senate Intelligence Committee, echoed these sentiments, stressing the risks of allowing Russian software with deep system access to operate in the US.
Kaspersky Lab responded to the announcement by asserting that the US decision was based on geopolitical concerns rather than an objective evaluation of their products and services. The company indicated plans to pursue legal options to maintain its US operations.
The new restrictions will be phased in over the coming months. Starting 29 September, sales of Kaspersky software, along with downloads of updates, resales, and licensing, will be prohibited. The Commerce Department will also add three units of Kaspersky to a trade restriction list, barring US suppliers from doing business with them. This action is expected to damage Kaspersky's reputation and impact its overseas sales significantly.
Kaspersky has been under scrutiny by US regulators for several years. In 2017, the US Department of Homeland Security banned its antivirus product from federal networks due to alleged ties to Russian intelligence. The scrutiny intensified after Russia's invasion of Ukraine, with warnings from the US government about potential manipulation of Kaspersky software by Moscow.
The restrictions will also cover white-labeled products that integrate Kaspersky software, and violators of these new rules will face fines or potentially criminal charges for willful violations
With over 2.2 lakh corporate clients worldwide, including high-profile entities like the Qatar Olympic Committee and Volkswagen's retail division in Spain, Kaspersky's operations are expected to suffer from these sweeping restrictions.
In 2023, Kaspersky saw a growth of 11 per cent in net global sales bookings. This growth was largely propelled by a 24 per cent year-on-year (YoY) increase in sales of its B2B product portfolio. The company reported a global non-audited combined revenue of USD 721 million for the year, a 4 per cent drop, which the company attributed to “unfavourable changes in FX rate”.
(Inputs from Reuters)
