Kaspersky diversifies from cyber security after spying allegations – Financial Times

Russia’s most notorious cyber security company, Kaspersky, is trying to diversify into anti-drone technology and online voting products in an attempt to rehabilitate a business hit with spying allegations three years ago.

Eugene Kaspersky, chief executive, said in a video interview with the Financial Times that bans on the company’s antivirus software by the UK and US governments in 2017 on security grounds had triggered a 25 per cent drop in its US corporate sales.

With business growth stalled in the west, he said Kaspersky would launch systems to help airports or private landowners jam drone signals and election software secured by blockchain “so you can vote for the prime minister from your smartphone”.

Ms Kaspersky touted the anti-drone system in a video demonstration on the company’s website: “Not only are we not just an antivirus company, and not just a software company, we’re also now a company that makes hardware too, and sometimes that hardware looks slick, fancy, gorgeous!”

Kaspersky was one of the first private companies to be hit by espionage concerns in an era of great power rivalry between liberal democracies and authoritarian regimes such as Russia and China.

US and European security agencies have warned for years that the close relationship between companies and governments in Moscow and Beijing makes some commercial products potentially risky for their adversaries.

Most recently, this has resulted in a debate among the Five Eyes intelligence-sharing nations about whether to allow Huawei to supply their 5G networks. So far the US, UK, Australia and New Zealand have excluded the Chinese telecoms company from their 5G rollout, on the basis that Beijing may compel Huawei to spy on communications.

Speaking from Kaspersky’s headquarters overlooking the Moscow Canal, the 55-year-old founder described the fate suffered by his company and Huawei as “words from the same song”.

“In Huawei’s case and in our case there was no proof [of wrongdoing] at all, zero,” he said, arguing that the bans were the result of geopolitical friction rather than any malicious activity. Western relations with Russia and China have chilled to the point of being “frozen”, he added.

The effect on his business has been significant. The US Department of Homeland Security ordered federal agencies to stop using Kaspersky software in 2017 in response to fears that Russia’s Federal Security Service was using it to spy on the American government, either with or without the company’s knowledge.

Two months later, the UK’s National Cyber Security Centre, a branch of signals intelligence agency GCHQ, told British government departments involved in national security to ditch Kaspersky products

Mr Kaspersky has consistently denied any links with the Kremlin and dismissed the allegations at the time as “conspiracy theories”, saying it was “absurdly ridiculous” to assume that just because he was brought up in Soviet Russia, “my company and I must be bosom buddies with the Russian intelligence agencies”. 

Mr Kaspersky studied at a KGB training academy and later worked as a KGB military officer before founding the company in 1997.

He resisted direct questions about the ban and instead pointed to a transparency drive, which involves moving some data-processing functions from Russia to Zurich to reassure customers that sensitive information will be kept on neutral territory.

Kaspersky is also opening new “transparency centres” so that regulators including from Canada, Spain, Brazil and Malaysia can scrutinise their software.

Under the new regime, data from European and American customers is analysed in Zurich while data from clients in Asia, Africa and Russia continues to be processed in Moscow.

But the firewall only extends so far: technicians based in Russia and other locations around the world will still be able to access data stored in Switzerland. The company also appeared to have abandoned an earlier promise that requests for access from outside Zurich would be logged and monitored by an independent Swiss organisation.

The best way to allay suspicions might be to leave Russia entirely and re-establish the company in a new jurisdiction, but Mr Kaspersky dismissed the idea. “To be honest, I’m quite comfortable to stay as a Moscow company . . . because we don’t have any influence from Russian government,” he said, adding that the tax rules for Russian technology enterprises were “like a paradise”. Kaspersky had revenues of $685m in 2019, according to the company, with 400m users worldwide.

The entrepreneur is similarly reluctant to discuss accusations of the Kremlin’s aggression in cyber space. Asked about US and UK intelligence assessments that Russian-backed hackers sought to infiltrate medical research bodies to steal data on Covid-19 vaccines, he said he has no “hard data” to confirm the allegations, adding that, “they’re happening in many different nations . . . we have victims of the similar attacks in Russia as well.” 

Mr Kaspersky said that espionage attacks — including those on healthcare organisations, which have rocketed during the pandemic — were a “global problem” and that it was “very hard to attribute” them to particular actors. When discussing Huawei, he pointed out that suspicion cuts both ways — China and Russia were similarly sceptical about US technology. 

He said Russian hackers have benefited from the breakdown in relations between Moscow and the west, which had damaged international co-operation in combating cyber crime.

The pandemic, he added, has only made matters worse, spurring a boom in ransomware attacks against hospitals and healthcare organisations, which he likened to “a kind of terrorism”.

Kaspersky’s teams now detect an average of 400,000 new malicious applications a day, a rise of a quarter since before the pandemic. “To fight this problem there has to be very strong co-operation between different nations,” he said. “Unfortunately, right now, the links between different regions, different nations, east and west, they are broken.”

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