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The legal ramifications of a cyber attack

Guy Betar | Aug. 27, 2015
Guy Betar examines some of the causes for concern with the growing number and size of data breaches.


It is difficult to imagine that any medium to large sized business in Australia is not aware of the growing rate of data breaches around the world. This being true, then what has this to do with the law?

It seems inevitable that the growth in sophistication of technology brings with it a directly proportional growth in exposure to hacking.

There can be a variety of agendas behind hacking activities, from serious criminal ones, to those that aim to highlight flaws in the technology, or simply identify something the developers had not thought to prevent or address.

Certainly, when technology goes wrong, or it is hacked, or there is a loss from it –we will reach a critical mass point when losses have to be chased. At present, concerns over damage to reputation and market perception often dissuade sufferers from taking steps to recover losses, or indeed letting the world know it happened at all.

Companies do not want it made public that they have suffered cyber breaches. However, I am certain there will be a levelling process, if it has not already begun, when the embarrassment of suffering a digital break in will eventually be outweighed by the need to take steps to recover losses suffered. This of course presumes steps can be taken.

Let’s put this in context by looking at the recent events involving Fiat Chrysler in the US. Much to the chagrin of manufacturers of computer controlled devices (which is almost everything these days), there are large numbers of technically skilled people who make a living legally trying to find flaws and faults with the computer and software components of such devices.

In July this year, Fiat Chrysler found out just how effective such people can be. The company was left with no option but to issue a recall of 1.4 million vehicles.

That action was taken after an article was published in Wired magazine by a group of researchers who proved beyond doubt they could wirelessly hack into a Jeep Cherokee and control almost all its key functions, including breaks and steering.

No doubt it cost Fiat Chrysler a huge amount of money to carry out the recall and attempt to shut out the technical vulnerability of the vehicle control systems. However, it is likely that the really substantial cost suffered would not appear on the bottom line for some while - the damage to reputation.

As I have indicated in previous articles, it is unquestionable there are growing domestic and business concerns over cyber security – from hacks of social media, to major intrusions into corporate networks and data repositories.


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