Why is President Biden banning US sales of Kaspersky software?

This morning, Reuters reported that President Biden will ban the sale of Kaspersky software in the United States, representing another attack on the Russian economy as the country continues its war against Ukraine. Kaspersky is a Russian company that has been in operation since the early 1990s and is headquartered in Moscow. The company offers products ranging from antivirus protection to password management and endpoint security platforms. The White House is accusing the company of having close ties to the Kremlin, which they argue creates security concerns for users in the US. Similar arguments have been heard on Capitol Hill earlier this year as lawmakers rallied majorities in both chambers to ban TikTok.

According to Reuters, the new rules restricting the sale of Kaspersky will go into effect in late September. However, until the White House announces the details of the ban, this timeline remains an estimate. Additionally, the article notes that if the Department of Commerce only sanctions the Russian company and not its US subsidiary, the damage will be mostly “reputational” as it will not affect the company’s ability to operate in the US.

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How will the ban impact the company?

In 2016, the German news outlet Welt reported that sales in the US represented a fourth of all revenue generated by the company. If the company continues to rely heavily on a US customer base, the ban by the Biden administration could be extremely harmful to its bottom line. As the United States attempts to put more pressure on Russian officials and business owners to create a cost for the ongoing war, bans of this nature are just another tool arsenal of economic sanctions that can be imposed.