Make vendors liable for exploits

Make vendors liable for exploits
Make vendors liable for exploits

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By John Leyden
The Register
10th March 2008

Academics are calling for comprehensive security-breach notification in 
Europe and sanctions against ISPs that fail to clean up botnets as part 
of a series of measures designed to make insecure systems unprofitable.

A paper commissioned by the European Network and Information Security 
Agency (ENISA) attempts to apply methodologies from the field of 
economics to the world of software vulnerabilities, exploits, and hacker 

A theoretical framework for a discussion of the economics of security 
has been a hot topic in academic circles since the turn of the century. 
Among those looking closely at the problem is Ross Anderson of the 
University of Cambridge Computer Lab, one of the four authors of ENISA's 

In the real world investment in risk avoidance may not be profitable. 
Security failures often arise due to perverse incentives rather than the 
lack of suitable technology. For example, credit card firms can rely on 
business models that push the cost of fraud onto merchants and consumers 
rather than investing in reducing the problem themselves. That's because 
such investments would place them at a commercial disadvantage to their 

Establishing economic incentives for IT suppliers to produce more secure 
products is arguably an even greater problem because software publishers 
are not held liable for the shortcomings of their products. These 
shortcomings may damage consumer faith in ecommerce but fail to effect 
sales, so a market-based solution in absence of regulatory pressure is 
difficult to imagine.

An absence of trustworthy statistics on the extent of cybercrime further 
muddies the waters.

The paper, Security Economics and the Internal Market, aims to inform 
the development of European ecommerce policy. It identifies economic 
barriers for improving ecommerce security in Europe, assesses the impact 
of these barriers, and suggests incentives (regulatory, non-regulatory, 
technical, educational, etc) to remove these obstacles.

The report concludes with a number of recommendations to both government 
and industry on policy options and initiatives, including a 
comprehensive security-breach notification law for the EU, the 
establishment of an agency independent of the police and industry to 
assess the impact of cybercime, and fines or other sanctions against 
ISPs that fail to act on reports on compromised machines.

The researchers also want to develop EU standards so that network 
connected equipment is secure by default and vendors are automatically 
responsible for unpatched software, which will speed up the 
patch-creating process.

Anderson worked with Richard Clayton and Tyler Moore of Cambridge 
University as well as Rainer B=C3=B6hme of the technical University in 
Dresden in drawing up the paper, which they hope will spark a debate on 
the topic.

ENISA has launched a public consultation on its report, inviting 
comments from interested parties before the end of April, as explained 
here. Anderson's primer on the economics of security is here.

The last few years have seen growing interest in applying methodologies 
from social science to issues in information security. Security guru 
Bruce Schneier, for example, has published a number of articles on the 
psychology of security. =C2=AE

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