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Symantec in talks with Chinese government after software ban report

By Jim Finkle

BOSTON (Reuters) - U.S. security software maker Symantec Corp said it is holding discussions with authorities in Beijing after a state-controlled Chinese newspaper reported that the Ministry of Public Security had banned use of one of its products.

The China Daily reported last week that the ministry had issued an order to its branches across the nation telling them to uninstall Symantec's data loss prevention, or DLP, products from their systems and banning their future purchase, saying the software "could pose information risks." (http://bit.ly/1okVF3v)The vaguely worded report did not explain why the ministry believed Symantec's software presented a security threat.

Symantec is the latest large U.S. technology company to encounter challenges in China since last year when former National Security Agency contractor Edward Snowden began leaking details about U.S. surveillance programs. Other firms include Cisco Systems Inc, International Business Machines Corp and Microsoft Corp.

"This highlights the lingering issue many tech companies are facing in China," said FBR Capital Markets analyst Dan Ives.

He said that other U.S. providers of security software might find themselves in the same position as Symantec, though he declined to identify any specific companies.

Symantec spokeswoman Colleen Lacter said her company was in discussions with the Chinese government about the matter, though she declined to confirm or deny the newspaper's account of what had happened.

"The discussions are ongoing and it's premature to go into detail at this time," Lacter said via email.

She added that her company's software did not present any risks to the Chinese government. “Symantec takes the privacy and security of our customers’ information very seriously and our products do not have so-called 'Data Theft Backdoors,'" she said. When asked if other Chinese government agencies were pulling out Symantec's software, Lacter said: "We believe (this) is an isolated incident to the Ministry of Public Security."

The ministry declined to provide immediate comment by phone and did not respond to faxed questions.

DLP software helps organizations prevent workers from intentionally or unintentionally removing sensitive data from computer networks. It is one of several categories of security software sold by Symantec, which is best known for antivirus programs that detect malicious software on personal computers.

Talk of China's decision to target Symantec comes following reports in May that China banned government use of Windows 8, the current version of Microsoft Corp's operating system for personal computers.

The official Xinhua news agency said the ban was to ensure computer security after Microsoft ended support for its Windows XP operating system, which was widely used in China.

(Reporting by Jim Finkle; Additional reporting by Beijing Newsroom; Editing by Christopher Cushing, Richard Valdmanis and Jonathan Oatis)

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