Kaspersky refutes China ban claims

Procurement list excludes foreign vendors

Kaspersky, a leading anti-virus software vendor, said on Monday there is no evidence showing that its products are banned by the Chinese government.

Kaspersky said in a statement e-mailed to the Global Times it is aware that the central government procurement list has excluded all foreign security software suppliers, but pointed out that the list only applies to central government institutions, and local governments, State-owned enterprises and public service units are not covered by the list.

The official People's Daily said on its English Twitter feed early Sunday that the government's procurement agency has excluded Symantec and Kaspersky from a security software supplier list.

According to a notice published Thursday by the Central Government Procurement Center, it had authorized the use of five anti-virus software brands, all from China - Qihoo 360, CAJinchen, Beijing Jiangmin, Rising and Kingsoft.

Kaspersky said it is negotiating with the relevant departments to get into the list.

Symantec has yet to comment on the news. The vendor said in July it was in talks with authorities following reports that China had banned use of one of its products - data loss prevention software. At that time a Symantec spokeswoman said that there was no indication of a ban on the company's flagship anti-virus software programs, Reuters reported Sunday.

Xin Haiguang, a Beijing-based Internet expert, told the Global Times Monday that there is nothing unusual about the Chinese government deciding to stop using foreign anti-virus software.

"Information security has become an increasingly important issue around the world. All governments including China and the US will prefer to choose local brands out of such concerns," Xin said.

A US congressional investigation in 2012 also claimed Chinese telecom companies Huawei and ZTE were potential security threats and suggested the US government not use any equipment from the two companies.

Xin noted that the possible ban would be good news for domestic anti-virus software developers.

Symantec does not provide sales figures for the Chinese market. The company's sales revenue for the Asia Pacific region fell 10 percent to $1.2 billion in its financial year which ended in March.

An industry insider told financial news portal caixin.com on Monday that many of China's large State-owned enterprises and major Chinese banks have started to uninstall Symantec security software following an incident concerning the company's data loss prevention software.

Shares of Mountain View, California-based Symantec fell 0.39 percent to $23.08 by 11 am on Monday (US time).

Shares of New York-listed Qihoo 360 rose by 2.81 percent to $93.06 as of 11 am.

China's State Internet Information Office announced in May that it would start security vetting of major IT products and services used by national security and public entities, a Xinhua News Agency report said on Monday.

The country's security software market is estimated at 10 billion yuan ($1.62 billion), according to industry insiders. Firewall products have a market worth 4 billion yuan while anti-virus software has a market of 3 billion yuan.

However, analysts said China is not a premium market for foreign security software providers, noting that a government ban does less harm to these companies than a security breach incident.

There is no indication whether the government's move has any connection with China's emphasis on the security of IT products and software after Edward Snowden's leaks about the intelligence gathering project PRISM of the National Security Agency of the US, Xinhua said.

According to a study by research firm CCID Consulting, Qihoo 360 was the most favored security software by Chinese companies in 2013, leading the market with 42 percent coverage. Symantec and Rising followed with 18 percent and 13.5 percent market coverage, respectively.

The same study found that most government agencies tend to use Qihoo's products.