All over Europe organisations of all sizes are currently scrabbling desperately to get their house in order for 25 May 2018. What happens then? Only the biggest shake-up to Europe’s data protection laws in nearly a generation. The implications are immense, both in terms of the scope of the new regulation and the companies who will now be held liable.
There’s just one problem. The UK’s Snoopers’ Charter, or Investigatory Powers Act. Its enshrining into law of mass surveillance powers could create major problems down the line, possibly putting UK firms at a competitive disadvantage precisely at a time when they need the digital economy most.
What’s the problem?
Let’s start at the beginning. UK firms will have to comply with GDPR, even with Brexit looming. That’s because the extrication of the country from the EU will take at least two years from whenever Article 50 is triggered – presumably in March – and probably much, much longer. And even beyond that, the UK government has said in its Brexit white paper:
“The European Commission is able to recognise data protection standards in third countries as being essentially equivalent to those in the EU, meaning that EU companies are able to transfer data to those countries freely.
As we leave the EU, we will seek to maintain the stability of data transfer between EU Member States and the UK.”
This implies that the UK will broadly speaking harmonise its laws with the GDPR. But the bulk data collection powers granted by the IPA mean the regime is certainly not equivocal to that in Europe. Emily Taylor, CEO of Oxford Innovation Labs and associate fellow of Chatham House, told me that the European Court of Justice (CJEU) shows no signs on shifting its stance on bulk data collection – having recently ruled against the forerunner to the Snoopers’ Charter, DRIPA.
“Other elements of the judgment are likely to cause problems with the Investigatory Powers Act: the CJEU says that targeted data retention may be allowable, but must be restricted solely to fighting serious crime; warrants must be signed off by a court, not a minister; and the data concerned must be retained within the EU. All these will potentially conflict with core elements of the IP Act,” she told me.
If its kept as is, the Act could therefore impact the legality of data transfers between Europe and a newly independent UK, which will be bad news for most firms reliant on a thriving digital economy.
“The impact of conflicts between the GDPR and our Investigatory Powers Act may be to hamper the competitiveness of UK tech, particularly as the GDPR seeks to protect EU citizens’ data wherever it will be processed,” she argued.
Not great for America
This is a hot button issue for Europe In fact it’s the reason why data transfers to the US were put under threat after Safe Harbour was torn down because of fears of US authorities snooping on Europeans’ data. Despite a new agreement – Privacy Shield – being put in place, there could still be bumps in the road ahead.
“Transatlantic data flows will not be legal unless there is a robust framework in place to offer EU citizens’ data equivalent protection to what is enjoyed in the EU,” said Taylor.
“President Trump’s ‘America First’ policy is likely to renew tensions over Privacy Shield – a shaky compromise which was hurriedly reached following the CJEU’s obliteration of its predecessor ‘Safe Harbour’.”
KPMG’s globa privacy advisory lead, Mark Thompson, told me that firms outside of Europe that need to comply with the GDPR are better off keeping data on European citizens inside the EU so as not to fall foul of any changes to data transfer agreements.
“Despite the USA and EU having some cultural alignment, there is potential for significant culture clash between the EU’s view of a fundamental human right to privacy and the US view on what constitutes privacy, which is significantly different,” he added.
We’ll have to wait a while to see what the fallout of all this is. But with the UK government unlikely to countenance any changes to the IPA, there could be some potentially bad news for the country’s digital economy in the next few years if nothing changes.
We’re currently working our way through three of the four stages of industry evolution mapped out by Gartner. It claimed in a December report that efforts to integrate mobile and cloud-based apps into the car are almost complete – that’s one stage down. Then, up until 2024 it’ll be all about “digital lifestyle convergence”.
The report explained:
“This convergence means that consumers want to be able to communicate with friends and family members, remain productive to their workplace, and to be entertained with the content that they also access outside of the automobile. Users will also expect an automotive connectivity experience that is similar to other device experiences they are increasingly accustomed to, such as remote, over-the-air software updates and content/services upgrades.”
Microsoft has a good chance to capitalise on this shifting focus, with its new Connected Vehicle Platform. One of the five main pillars outlined by EVP of business development, Peggy Johnson, at CES, is “improved in-car productivity” via tools like Cortana, Dynamics, Office 365, Power BI and Skype for Business.
“For instance, imagine that Cortana seamlessly connects you whether you’re at home or in your car,” she explained. “Let’s say you’re on your phone at home and tell Cortana to set up a meeting for you and your colleague the next morning at a coffee shop. The next time you get in your car, Cortana reminds you of the morning meeting and starts navigation to get you to that coffee shop.”
With its heritage in the office productivity space, Microsoft obviously has an edge in these scenarios over connected car rivals like Apple, Google and Amazon, although its Azure-powered platform will also cover predictive maintenance, advanced navigation, customer insights and autonomous capabilities.
The platform’s open, partnership-based approach could also play well with consumers who are sick of many current systems, according to Quocirca analyst Clive Longbottom.
“Users are increasingly frustrated with in-car technology,” he told me. “Even new models tend to be based on old, proprietary technology; technology that is impossible to swap out and replace with something more up to date and flexible.”
The Redmond giant knows the industry better than most, continued IHS Markit principal analyst Egil Juliussen.
“The auto industry is among those global industries which adds numerous requirements for how connected cars are treated (i.e. privacy, data storage locations, etc.),” he told me via email. “All of these complexities make it expensive and time-consuming for any auto manufacturer (even the largest) to develop, update and maintain cloud and software platforms to manage their network of connected cars.”
Partners on board
And therein lies the opportunity for Microsoft and others. The firm has also announced partnerships with Volvo, Daimler, Nissan-Renault, BMW and Toyota which will see each use its cloud-based tech to create their own unique platforms. This ability to customise is another obvious benefit of its platform for carmakers.
So where are we headed? Well, autonomous vehicles of course. Gartner reckons that by 2030 self-driving tech might even have created a new car ownership model – where we simply “hire” on-demand driverless cars for our journeys rather than own a vehicle outright. Already a third of Americans the analyst surveyed said they’d forgo purchasing a new vehicle if they could pay for such a service.
Apple CarPlay and Google’s Android Auto are certainly major contenders for the connected car crown, especially in terms of integrating the car into the whole mobile experience. But Microsoft’s cloud-based approach, which is flexible enough to incorporate new technologies as it goes, has a decent chance of winning more carmaker minds and driver hearts.
Looking forward to Christmas? Spare a thought for the nation’s retailers, who will be battling as many as one million fraud attempts each day in the period following Black Friday, according to new estimates.
They come from ThreatMetrix, a fraud prevention company with good industry insight thanks to its Digital Identity Network platform which analyses over 20 billion transactions globally each year.
It predicted a 60% increase in fraudulent e-commerce transactions in Q4 2016 compared to the last three months of 2015.
Product and data evangelist, Rebekah Moody, told me that this time of year usually sees an uptick in activity as dodgy transactions are less likely to be spotted, because retailers loosen fraud filters to let more transactions through.
“Transaction volumes are much higher – we saw huge daily peaks for some merchants in the same period last year. This means some merchants may choose to adjust their risk tolerance to ensure that more transactions can be processed with less friction,” she explained.
Cybercriminals also jump on the fact that average basket values are usually higher in the run up to Christmas.
“Fraudsters capitalise on this by trying to sneak through higher value transactions that are less likely to flag as unusual in amongst the sea of high value transactions,” said Moody. “Last year we saw the average basket value of rejected transactions was around 70% more than the overall average. We expect this trend to be mimicked this holiday season.”
The problem is compounded by current fraud prevention technologies, many of which have problems detecting some of the more advanced techniques used by the black hats, including device and IP spoofing and automated bots.
The latter threat is increasingly prominent to the point where, during attack spikes, bot traffic exceeds legitimate user traffic, according to the company’s latest Cybercrime Report for Q3.
It has the following:
“What might begin as a simple account validation using a basic bot evolves to using a complex bot to guess unknown passwords, to a bot that masquerades as genuine human traffic to trick unsuspecting businesses.”
Another tactic which makes fraud hard to spot is when the scammer manages to trick a victim into downloading malware onto their machine.
“For example, a fraudster convinces a customer to download some remote access software after playing to their worst fears that their account is being hacked following a data breach. They pretend to be from the consumer’s bank, and reassure them that they will protect their account from the impending hack,” explained Moody.
“In actual fact they manage to take over the consumers account after the consumer has legitimately logged in.”
Because there are no unusual log-in patterns, strange locations or hacked devices to monitor, it might look like a legitimate transaction.
“The key here though is that the remote access software was suddenly enabled, and then the fraud occurred,” Moody told me. “It’s not the fact that there was remote access software installed; many consumers use this legitimately. It was the change in behaviour. Unless a fraud system is advanced enough to detect this, it could be easy to see how this technique could cause huge issues.”
The best systems work in the background, using contextual data and real-time behavioural analytics in a way that is invisible to the user. But unfortunately they’re still not the norm. According to Barclays, two thirds of retailers (64%) are confident that their digital infrastructure will cope well with the Christmas rush. But if they prioritise up-time and sales over fraud prevention, there could be some nasty surprises down the line.
As the dust settles on Donald Trump’s extraordinary ascent to the White House, what do we know of his plans for cybersecurity? I’ve been speaking to a variety of experts for an upcoming Infosecurity Magazine feature and, believe it or not, the majority are not particularly optimistic of the future.
His official website, outlining the Trump ‘vision’ for cybersecurity, focuses on some easy wins:
- An immediate review of critical infrastructure and federal cyber “defences and vulnerabilities” by a Cyber Review Team comprised of members of the military, law enforcement and private sector
- The same team to establish “protocols and mandatory awareness training” for all federal employees
- DoJ to create Joint Task Forces to co-ordinate federal, state and local law enforcement cybersecurity responses
- Defence secretary to make recommendations on enhancing US Cyber Command
- Development of offensive cyber capabilities
Doug Henkin, litigation partner at Baker Botts, said the focus on awareness raising is a positive.
“This appears to be a good development for setting a positive tone to lead from above with respect to best practices for protecting against cybersecurity threats and is also essential for corporations seeking to ensure good cybersecurity preparedness,” he argued.
“It is essential to increase training as the new administration has recognised, while also remaining vigilant to how cyber attacks occur.”
That’s pretty much where the good news ends.
It might be too early to judge president-elect Trump on his cybersecurity credentials. But it must be remembered that, despite his bluster over ‘Crooked Hillary’ and her email blunder, his businesses were found to be a whole lot worse when it comes to security. Independent researcher Kevin Beaumont scanned publicly available records last month and found many of Trump organizations’ messaging servers are running the no-longer supported Windows Server 2003 and Internet Information Server (IIS) 6. He also found 2FA unsupported, meaning user accounts are vulnerable to password phishing or brute force attacks.
What’s more, as a briefing document from think tank the Information Technology and Innovation Foundation (ITIF) tells us, Trump has promised in the past to apply tariffs against China if it “fails to stop illegal activities” and to “adopt a zero tolerance policy on intellectual property theft.”
Given what we know about China, this is a dangerous game to play. Beijing will continue to pretend it is abiding by the agreement between presidents Obama and Xi to stop state-sponsored economic cybercrime. And that could lead to heavy reciprocal penalties on US tech firms in China, such as Apple. The state-backed Global Times has already warned China will adopt a tit-for-tat approach if Trump plays it tough.
Silicon Valley scares
Trump’s election is also a disaster for Silicon Valley. The former reality TV star has expressed support in the past for the FBI’s stance in trying to force Apple into building a backdoor to unlock the San Bernardino shooter’s phone. He even called for a ban on Apple products in response to the firm’s refusal to do so. We can therefore expect more pressure on them to undermine encryption, which would be a disaster for businesses and consumers everywhere, as well as the American tech firms themselves.
As if that weren’t enough, he’s also a big fan of the Patriot Act and will inherit a fearsome surveillance apparatus from Obama. The Democrat is already being blamed for failing to overhaul the huge encroachment on civil liberties enacted by the Bush administration. Writing in the Guardian, Freedom of the Press Foundation executive director, Trevor Timm, had this:
“What horrors are in store for us during the reign of President Trump is anyone’s guess, but he will have all the tools at his disposal to wreak havoc on our rights here at home and countless lives of those abroad. We should have seen this coming, and we should have put in place the safeguards to limit the damage.”
Let’s hope he surprises us all.
Sci-fi writers have been warning us about the coming of the singularity for a decade now. And while we’re some years away from having to contemplate such a future, AI, machine learning, big data and other technologies are developing at a pace which is already beginning to impact the global workforce.
I chatted to some experts on the subject for an upcoming feature to find out whether CIOs should be terrified or enthused by the prospect of robot workers.
The truth is that they’re already here, in many heavy industries like tech manufacturing. In May this year a local government official in the Chinese district of Kunshan announced contract manufacturing giant Foxconn was reducing “employee strength” from 110,000 to 50,000 workers, because of investments in robots. But what about when they spread into other industries? As far back as 2014, Gartner was predicting that as many as one in three jobs will be “converted to software, robots and smart machines by 2025” as software advances mean technology systems begin to replace cognitive tasks as well as factory jobs.
Meanwhile, a report from the Bank of England last year estimated up to 15 million UK jobs could be at risk of automation in the future. And a Deloitte/Oxford University study in January claimed 35% of today’s jobs have a “high chance” of being automated in the next 10-20 years.
For IHS Markit analyst, Wilmer Zhou, the coming robot hordes represent both a challenge and an opportunity to employers. Aside from manufacturing, he picked out several industries where jobs are potentially most at risk, including agriculture, logistics, and specialist domestic care. Most surprising for me was healthcare.
“It’s one of the industries with relatively high robot deployment such as surgical robots,” he told me via email. “IHS forecasts that robots in the medical industry will be one of the fastest growth sectors, with the decreasing of the average sale price of surgical robots and expansion of medical operation tasks.”
For CIOs looking to maximise the potential offered by these new automated workers, it will be important to create trust in the bots, argued Forrester principal analyst, Craig Le Clair.
“Cognitive systems can end up learning undesirable behavior from a weak training script or a bad customer experience. So build ‘airbags’ into the process,” he told me.
“Assess the level of trust required for your customer to release their financial details. Get compliance and legal colleagues on board as early as possible. Cognitive applications affect compliance in positive and negative ways. Be prepared to leverage the machines ability to explain recommendations in an understandable manner.”
Also important is to foster human and machine collaboration wherever possible, to reduce friction between the two.
“Rethink talent acquisition and your workplace vision,” Le Clair explained. “Some 78% of automation technologists foresee a mismatch of skill sets between today’s workers and the human/machine future, with the largest gaps in data, analytics, and cognitive skills.”
The bottom line is that robots and AI are here to stay. Whether they’ll have a net positive or negative impact on the workplace is up for discussion, but it may well hinge on how many so-called ‘higher value’ roles there are for humans to move into once they’ve been displaced by silicon.
The South China Sea is an increasingly dangerous place to be in cyberspace. And as China is involved in territorial disputes over the area that bears its name with virtually all of its neighbours, there are no shortages of targets for its army of state-sponsored operatives.
F-Secure is the latest security vendor to confirm what most of us know already – that Chinese hackers, most likely working for the state, have been systematically stealing data from organisations with interests in the region for years now. It’s new report, NanHaiShu: RATing the South China Sea, details a new piece of information-stealing malware used in campaigns targeting government and private sector firms. Why? They were all involved, directly or indirectly, in a recent UN tribunal over ownership of a group of rocks in the South China Sea. Victims included the Department of Justice of the Philippines, the organisers of the Asia-Pacific Economic Cooperation (APEC) Summit and a major international law firm involved in the tribunal
F-Secure cyber security adviser, Erka Koivunen, told me he suspects a nation state was behind the attacks, although definitive attribution is always hard.
“Admittedly the malware itself may not be the most sophisticated piece of code there is. That doesn’t however mean that the operation wasn’t sophisticated,” he said via email. “The lack of zero-days and bleeding edge alien technology may admittedly seem a bit boring, but in fact is a sign of cold calculation and professionalism on the level of execution.”
This report is the latest of a long line of similar intelligence highlighting extensive cyber espionage in the region related to Beijing’s interests in the South China Sea and the rocks, reefs and islands that dot the landscape. Late last year a ThreatConnect report revealed an alleged PLA cyber espionage campaign dating back five years and targeting the Philippines, Singapore, Thailand, Vietnam and many others in the region. US interests have also been attacked.
William Glass, threat intelligence analyst at FireEye, believes this is just the beginning, as China begins to flex its muscles in the region.
“More recently, we have seen the list of targets expand to energy companies, legal firms, and even GitHub, targeted by China’s Great Cannon in March 2015,” he told me. “Beyond simply stealing information, Beijing has found there are benefits to using cyberspace to propagandise and attempt to influence behaviour.”
He claimed that the army’s new Strategic Support Force may see disputes in the area as the perfect opportunity to test its significant capabilities, which could range from range from “typical cyber espionage to learn of plans and intentions of commercial companies to efforts designed to influence companies’ decisions to invest or operate in the South China Sea.”
“Recently, the Chinese media has singled out Australia and Japan for particularly harsh criticism following the tribunal ruling,” Glass explained.
“It’s possible that China-based groups—with or without official government backing—will target Australian and Japanese commercial interests in retaliation for perceived interference or in an attempt to force Canberra and Tokyo to more carefully consider any follow-on action.”
For starters, firms working in the energy, logistics and shipping, and political and legal advocacy sectors in the region would do well to redouble their cyber security efforts. But the truth is that any organisation that deals with China or works in an industry where Chinese companies have interests – which is virtually every organisation – should consider the threat of state-sponsored attacks from the East. Yes, it’s more likely they’ll encounter ransomware than an info-stealing RAT guided by the PLA. But the threat is there, and as UK organisations increasingly look to the Middle Kingdom in this post-Brexit world, it’s one they should all take seriously.