Kaspersky CEO says hack claims cutting U.S. cyber security sales

Eugene Kaspersky, Chief Executive of Russia's Kaspersky Lab, speaks during an interview with Reuters in Moscow, Russia October 27, 2017. REUTERS/Maxim Shemetov

MOSCOW/WASHINGTON (Reuters) – Eugene Kaspersky told Reuters on Friday that the Moscow-based cyber security firm that bears his name would see a ‘single-digit’ drop in U.S. sales this year as a result of suspicions about his company’s ties to the Russian government, but its global revenue should still increase.

By turns frustrated and defiant in an 80-minute interview in his Moscow office, the founder and head of the embattled antivirus software maker denounced what he called an “information war” against his company, repeatedly asserting that “we’ve done nothing wrong.”

Kaspersky said the company’s interactions with law enforcement in Russia and elsewhere was “limited to cyber crime investigations, data sharing about cyber crime – that’s it.”

He added: “We have zero, zero wrong connections, contacts or assistance to espionage agencies. Zero.”

The interview was part of the global Reuters Cyber Security Summit. For other news from the summit, click www.reuters.com/cyberrisk

Founded in 1997, Kaspersky Lab boasts more than 400 million global customers, a reach that has made it one of the world’s largest suppliers of antivirus software.

But the company has struggled to find success as a vendor to the U.S. government, one of the world’s largest buyers of cyber tools, amid long-running suspicions about the company.

Anton Shingarev, Kaspersky Lab’s vice president of public affairs, told Reuters during the interview the company had abandoned efforts to sell its services to the U.S. government and that it would wind down its Washington-area subsidiary, KGSS.

“It is pretty much impossible to sell to U.S. government these days, and we don’t have any plans to do that,” Shingarev said, adding that the federal agency market had been negligible for the company. He said the company was looking at switching KGSS employees to different roles in the company, such as enterprise and intelligence service sales.

U.S. President Donald Trump’s administration last month ordered Kaspersky’s products removed from U.S. government computers, citing concerns about Kremlin influence and saying the software could jeopardize national security.

Retailers Best Buy Co Inc (BBY.N) and Office Depot Inc (ODP.O) have also pulled Kaspersky products from their shelves.

Despite those setbacks, Kaspersky said he expected global revenue for his company to reach about $700 million in 2017. It reported $644 million in global revenue in 2016, according to unaudited figures under International Financial Reporting Standards.

The loss of sales in the United States would be “less than 10 percent,” Kaspersky said. “It’s because of this information war against our company, this is the main reason.”

Kaspersky Lab has become a lightning rod in recent months as it has faced allegations by the U.S. government that its antivirus products can be used by Russian spies to conduct cyber espionage.

The controversy surrounding the company reflects mounting fear and distrust of Russia over widespread allegations that it interfered in the U.S. presidential election and was behind a wave of destructive global hacking attacks.

Kaspersky Lab earlier this week confirmed reports that its security software had taken source code for a secret American hacking tool from a personal computer in the United States in 2014, an incident that has heightened suspicions about the company.

Eugene Kaspersky said the company had disposed of the code as soon as it learned that it was classified information.

U.S. officials have often alleged Kaspersky has ties to Russia’s Federal Security Service (FSB), the main successor to the KGB. Eugene Kaspersky attended a KGB school and the company has acknowledged doing work for the agency.

Reporting by Jack Stubbs in Moscow, Dustin Volz in Washington, Joseph Menn in San Francisco and Jim Finkle and Alastair Sharp in Toronto; Editing by Jonathan Weber and Bill Rigby

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.


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