Category: Cyber Security

China intensifies data protection of companies

15. July 2021

The state leadership in Beijing is tightening its data protection rules. Chinese driving service provider Didi has now become the subject of far-reaching data protection regulatory measures. Other companies could soon be affected as well.

For months now, Chinese regulators and ministries in China have been issuing a slew of new regulations that not only affect tech companies, but are also directed at how companies handle data in general.

A prime example of China’s “new” data protection policy can be seen in Didi’s public launch on the New York Stock Exchange. The Uber rival only went public for a few days and was urged by the Chinese authorities to remove its app from the app store before the end of the week. The reason for this is reported to have been serious data protection violations by the company, which are now being investigated. The company is said to have processed the collection and use of personal data by the company in a privacy-hostile manner.

Didi was ordered to comply with legal requirements and adhere to national standards. It should also ensure that the security of its users’ personal data is effectively protected.

The announcement had sent shares of the stock market newcomer crashing by more than 5% as of Friday. The news also caused tech stocks to fall on Asian exchanges.

Didi is the nearly undisputed leader among ride-hailing services in China, with 493 million active users and a presence in 14 countries.

Beijing’s new data protection

The actions of Chinese authorities or the Chinese leadership against tech companies speak for a rethinking of the Chinese leadership in terms of data protection.

Initially, there is much to suggest that the state leadership wants to get companies more under control. This is also to prevent third countries from obtaining data from Chinese companies and to prevent Chinese companies from installing themselves abroad.

According to reports, a document from the State Council in Beijing indicates that stricter controls are planned for Chinese companies that are traded on stock exchanges abroad. Capital raised by emerging Chinese companies on foreign stock markets, such as in New York or Hong Kong, will also be subject to more stringent requirements. Especially in the area of “data security, cross-border data flow and management of confidential information”, new standards are to be expected.

However, the aim seems also to better protect the data of Chinese citizens from unauthorized access by criminals or excessive data collection by tech groups and companies.
This is supported by the fact that the Chinese leadership has introduced several rules in recent years and months that are intended to improve data protection. Although the state is not to cede its own rights here, citizens are to be given more rights, at least with respect to companies.

The introduction of the European General Data Protection Regulation also forced Chinese technology companies to meet global data protection standards in order to expand abroad.

China’s data protection policy thus seems to be a contradiction in terms. It is a step towards more protection of the data subjects and at the same time another step towards more control.

British Airways could reach a settlement over the 2018 data breach

7. July 2021

Back in 2018 British Airways was hit by a data breach affecting up to 500 000 data subjects – customers as well as British Airways staff.

Following the breach the UK’s Information Commissioners Office (ICO) has fined British Airways firstly in 2019 with a record fine of £183.000.000 (€ 205.000.000), due to the severe consequences of the breach. As reported beside inter alia e-mail addresses of the concerned data subjects also credit card information have been accessed by the hackers.

The initial record fine has been reduced by the ICO in 2020 after British Airways appealed against it. The ICO announced the final sanction in October 2020 –  £20.000.000 (€ 22.000.000). Reason for the reduction has been inter alia the current COVID-19 situation and it’s consequences for the Aviation industry.

Most recently it has been published that British Airways also came to a settlement in a UK breach class action with up to 16 000 claimants. The details of the settlement have been kept confidential, so that the settlement sum is not known, but the law firm, PGMBM, representing the claimants, as well as British Airways announced the settlement on July 6th.

PGMBM further explains, that the fine of the ICO “did not provide redress to those affected”, but that “the settlement now addresses” the consequences for the data subjects, as reported by the BBC.

The rising threat of Ransomware

28. June 2021

Ransomware attacks are on a steep rise as the global pandemic continues. According to the cybersecurity firm SonicWall, there were more than 304 million attempted ransomware attacks tracked by them in 2020, which was a 62 percent increase over 2019. During the first five months of 2021, the firm detected another 116 percent increase in ransomware attempts compared to the same period in 2020. Another cybersecurity firm called Cybereason found in a recent study interviewing nearly 1,300 security professionals from all around the world that more than half of organisations have been the victim of a ransomware attack, and that 80 percent of businesses that decided to pay a ransom fee suffered a second ransomware attack, often times by the same cybercriminals.

Ransomware is a type of malicious software, which encrypts files, databases, or applications on a computer or network and perpetually holds them hostage or even threatens to publish data until the owner pays the attacker the requested fee. Captivated data may include Personal Data, business data and intellectual property. While Phishing attacks are the most common gateway for ransomware, there are also highly targeted attacks on financially strong companies and institutions (“Big game hunting”).

Alluding to the industry term Software-as-a-Service (SaaS), a new unlawful industry sub-branch has emerged in recent years, which according to security experts lowered the entrance barriers to this industry immensely: Ransomware-as-a-Service (RaaS). With RaaS, a typical monthly subscription could cost around 50 US-Dollars and the purchaser receives the ransomware code and decryption key. Sophisticated RaaS offerings even include customer service and dashboards that allow hackers to track the status of infections and the status of ransomware payments. Thus, cybercriminals do not necessarily have to have the technical skills themselves to create corresponding malware.

Experts point to various factors that are contributing to the recent increase in Ransomeware attacks. One factor is a consequence of the pandemic: the worldwide trend to work from home. Many companies and institutions were abruptly forced to introduce remote working and let employees use their own private equipment. Furthermore, many companies were not prepared to face the rising threats with respect to their cybersecurity management. Another reported factor has been the latest increase in value of the cryptocurrency Bitcoin which is the preferred currency by criminals for ransom payments.

Successful Ransomware attacks can lead to personal data breaches pursuant to Art. 4 No. 12 GDPR and can also lead to the subsequent obligation to report the data breach to the supervisory authorities (Art. 33 GDPR) and to the data subjects (Art. 34 GDPR) for the affected company. Businesses are called to implement appropriate technical and organisational measures based on the risk-based approach, Art. 32 GDPR.

Earlier this month, the Danish Data Protection Authority provided companies with practical guidance on how to mitigate the risk of ransomware attacks. Measures to ensure the ongoing confidentiality, integrity, availability and resilience of processing systems when faced with ransomware may include providing regular trainings for employees, having a high level of technical protection of systems and networks in place, patching programs in a timely manner, and storing backups in an environment other than the normal network.

New details on alleged spying on allies by the NSA

18. June 2021

It has been known for years that the US National Security Agency (NSA) had been targeting leading politicians. But now new details of the spying operation are coming to light. Several European media investigated the case and found out that the NSA had been using Danish underwater internet cables from 2012 to 2014 to eavesdrop on leading European politicians. It was only through the research that the members of the governments learned of the spying. With regard to this, questions arose, whether Denmark was involved and knew about the operation. Now various European countries demand answers to the allegations.

The media reports revealed that the Danish Defence Intelligence Service (DDIS) had helped the NSA to wiretap European politicians (in German) by allowing the NSA to use the secret Sandagergårdan listening post near Copenhagen. An important internet hub for various underwater cables was then tapped there. The NSA apparently got access to text messages, telephone calls and internet traffic including searches, chats and messaging services.

Following the revelations by former NSA contractor Edward Snowden and a subsequent investigation by a secret internal working group at DDIS, the Danish-US cooperation in the surveillance of European neighboring countries was documented in an internal report of DDIS in 2015. However, the findings have not been disclosed until today. Nevertheless, the Danish government has probably known about the spying operation since 2015 at the latest. More than that, the surveillance apparently also targeted Denmark itself (in German), including the Ministry of Foreign Affairs and the Ministry of Finance.

Danish Defence Minister Trine Bramsen was informed about the spying in August 2020. In the wake of that, some DDIS employees were fired, without a full explanation being released. The government said at the time that an audit had raised suspicions of illegal surveillance by DDIS. In October 2020, the Danish Ministry of Justice ordered a commission of inquiry into the operations at DDIS. Its conclusions are due at the end of 2021.

French President Emmanuel Macron and German Chancellor Angela Merkel, being among those affected by the espionage, made clear that such tactics were not acceptable between allies. Norwegian Prime Minister Erna Solberg and Swedish Defence Minister Peter Hultqvist agreed with the statements. While emphasizing the value of relations between Europeans and Americans, they insisted on explaining the case by the two accused countries. Neither of the intelligence services would comment on the allegations. The Danish Defence Minister only stated in general terms that systematic wiretapping of close allies was unacceptable.

Microsoft Exchange Target of Hacks

29. March 2021

Microsoft’s Exchange Servers are exposed to an ever-increasing number of attacks. This is the second major cyberattack on Microsoft in recent months, following the so-called SolarWinds hack (please see our blog post). The new attacks are based on vulnerabilities that have been in the code for some time but have only recently been discovered.

In a blog post published on March 2nd, 2021, Microsoft explains the hack and a total of four found vulnerabilities. The first vulnerability allows attackers to gain access to a Microsoft Exchange Server, the second vulnerability allows them to execute their code on the system, and the third and fourth vulnerabilities allow the hacker write access to arbitrary files on the server. Microsoft Exchange Server versions 2019, 2016, 2013 and 2010 are affected, and Microsoft released a security update for all of them on March 2nd, even though support for Microsoft Exchange Server 2010 ended in October 2020.

Reportedly, Microsoft was informed about the vulnerability in January. Since then, a growing number of hacker groups have started to use the exploit. The initial campaign is attributed to HAFNIUM, a group believed to be state-sponsored and operating out of China. According to Microsoft, the vulnerabilities have been in the code for many years without being discovered. Only recently has Microsoft become aware of these vulnerabilities and begun working on them. Microsoft shared information on the vulnerability through the Microsoft Active Protections Program (Mapp), where they share information with a group of 80 security companies. The attacks began shortly after Microsoft began working to resolve the vulnerabilities. There are many similarities between the code Microsoft shared through Mapp and the code the attackers are using.

In an article about a recently published One-Click Exchange On-premises Mitigation Tool (EOMT), Microsoft developers describe how admins can secure Exchange servers against the current attacks within a very short amount of time. The tool only serves as an initial protective measure. For comprehensive protection, available security updates must be installed. In addition, it must be checked whether the hackers have already exploited existing gaps to leave behind backdoors and malware. This is because the updates close the gaps, but do not eliminate an infection that has already occurred. Hackers often do not use gaps immediately for an attack, but to gain access later, for example for large-scale blackmail.

Under the General Data Protection Regulation (GDPR), organizations affected by an attack on personal data must, in certain circumstances, report such an incident to the relevant supervisory authority and possibly to the affected individuals. Even after a successful patch, it should be kept in mind that affected organizations were vulnerable in the meantime. Pursuant to Art. 33 of the GDPR, system compromises that may affect personal data and result in a risk to data subjects must be notified to the competent supervisory authority. For such a notification, the time of discovery of the security breach, the origin of the security breach, the possible scope of the personal data affected, and the first measures taken must be documented.

SMS flaw lets hackers take control of individuals’ phones for $16

24. March 2021

Hackers have discovered a new method of gaining access to individuals’ mobile devices via text message rerouting, Vice reports. Apparently, all it takes is $16 to retrieve a person’s messages from a third-party provider and then take over the phone number and, with it, various associated accounts.

All of that is possible due to a text messaging service called Sakari that allows businesses to send SMS reminders, alerts, confirmations and marketing campaigns. The company lets business users import their own phone number in order to be contacted by the businesses. However, the service has a significant security vulnerability. Its use is enabled by purchasing Sakari’s $16 per month plan and then filling out a document saying that the signer has authority to change phone numbers. Although the document points out that the user should not conduct any unlawful, harassing or inappropriate behavior, there is no subsequent call or text notification from Sakari asking the user to confirm the consent to the transfer. That’s why it is largely effortless to simply sign up with another person’s phone number and receive their text messages instead. From that moment on, it can be trivial to hack into other accounts associated with that phone number by sending login requests, as they rely on SMS codes.

This overlooked security flaw shows how frighteningly easy it is to gain access to the tools necessary to seize phone numbers. It requires less technical skill or knowledge than, for instance, SIM jacking. It demonstrates not only the insufficient regulation of commercial SMS tools but also gaping holes in the telecommunications infrastructure, since a hacker only needs to pretend having the user’s consent.

The attack method has implications for cybercrime and poses an enormous threat to safety and security. It enables criminals to harass people, drain their bank account, tear through their digital lives or intercept sensitive information or personal secrets. At this time, it is not clear to what extent this attack method is being applied to mobile numbers.

CTIA, a trade association representing the wireless industry, stated that they immediately launched an investigation into the matter and took precautionary measures. Adam Horsman, co-founder of Sakari, responded to the insufficient authentication of their customers by saying that Sakari added a security feature where a number will receive an automated call in order to confirm the consent given. Moreover, Sakari will verify all existing text-enabled numbers. But Sakari is just one company. And there are plenty of others in this industry. As this method raises serious concerns, it is important for mobile carriers to do more to protect their customers’ privacy and security, such as notifications when registering a new device or a two-factor-authentication.

Data Breach made 136,000 COVID-19 test results publicly accessible

18. March 2021

Personal health data are considered a special category of personal data under Art. 9 of the GDPR and are therefore given special protections. A group of IT experts, including members of the German Chaos Computer Club (CCC), has now revealed security gaps in the software for test centres by which more than 136,000 COVID-19 test results of more than 80,000 data subjects have apparently been unprotected on the internet for weeks.

The IT-Security experts’ findings concern the software “SafePlay” of the Austrian company Medicus AI. Many test centres use this software to allocate appointments and to make test results digitally available to those tested. In fact, more than 100 test centres and mobile test teams in Germany and Austria are affected by the recent data breach. These include public facilities in Munich, Berlin, Mannheim as well as fixed and temporary testing stations in companies, schools and daycare centres.

In order to view the test results unlawfully, one only needed to create an account for a COVID-19 test. The URL for the test result contained the number of the test. If this number was simply counted up or down, the “test certificates” of other people became freely accessible. In addition to the test result, the test certificate also contained the name, date of birth, private address, nationality and ID number of the person concerned.

It remains unresolved whether the vulnerabilities have been exploited prior to the discovery by the CCC. The CCC notified both Medius AI and the Data Protection Authorities about the leak which led to a quick response by the company. However, IT experts and Privacy-focused NGOs commented that Medicus AI was irresponsible and grossly negligent with respect to their security measures leading to the potential disclosure of an enormous amount of sensitive personal health data.

Firefox introduces new tool to prevent cookie-based tracking

12. March 2021

Mozilla has announced the introduction of a new privacy tool for its Firefox browser, “Total Cookie Protection”, aimed at blocking cookie-based tracking by ad-tech companies. The new feature prevents cross-site tracking by confining cookies to the website where they were created and placing them into a so-called “cookie jar”.

Mozilla refers to cookies as “a useful technology, but also a serious privacy vulnerability” because they are shared between websites which enables tracking user’s browsing behavior. This approach allows advertising companies, in particular, to gather information about users, their browsing habits and interests as well as create detailed personal profiles.

Total Cookie Protection works by maintaining a separate “cookie jar”, assigned to each website visited. This procedure prohibits the deposited cookie from being shared with any other website. A limited exception only applies to cross-site cookies needed for non-tracking purposes.

Firefox has blocked some cookies used by ad-tech companies for years in an effort to fight against cookie abuse and web tracking. In order to achieve this goal, “Enhanced Tracking Protection” (ETP) was introduced in 2019. It blocks many of the companies identified as trackers by Mozilla’s partners at Disconnect. Despite being an effective strategy to stop tracking, this form of cookie blocking has its limitations, Johann Hofmann and Tim Huang remark on the developer blog Mozilla Hacks:

ETP protects users from the 3000 most common and pervasive identified trackers, but its protection relies on the fact that the list is complete and always up-to-date. Ensuring completeness is difficult, and trackers can try to circumvent the list by registering new domain names. Additionally, identifying trackers is a time-consuming task and commonly adds a delay on a scale of months before a new tracking domain is added to the list.

With this in view, Total Cookie Protection has been built into ETP as a new privacy advance. The feature intends to address the limitations of ETP and provide more comprehensive protection. It is complemented by Supercookie Protections rolled out last month, which shall eliminate the usage of non-traditional storage mechanisms (“supercookies”) as a tracking vector.

In conclusion, Mozilla stated:

Together these features prevent websites from being able to “tag” your browser, thereby eliminating the most pervasive cross-site tracking technique.

Dutch data scandal: illegal trade of COVID-19 patient data

19. February 2021

In recent months, a RTL Nieuws reporter Daniël Verlaan has discovered widespread trade in the personal data of Dutch COVID-19 test subjects. He found ads consisting of photos of computer screens listing data of Dutch citizens. Apparently, the data had been offered for sale on various instant messaging apps such as Telegram, Snapchat and Wickr. The prices ranged from €30 to €50 per person. The data included home addresses, email addresses, telephone numbers, dates of birth and BSN identifiers (Dutch social security number).

The personal data were registered in the two main IT systems of the Dutch Municipal Health Service (GGD) – CoronIT, containing details about citizens who took a COVID-19 test, and HPzone Light, a contact-tracing system, which contains the personal data of people infected with the coronavirus.

After becoming aware of the illegal trade, the GGD reported it to the Dutch Data Protection Authority and the police. The cybercrime team of the Midden-Nederland police immediately started an investigation. It showed that at least two GGD employees had maliciously stolen the data, as they had access to the official Dutch government COVID-19 systems and databases. Within 24 hours of the complaint, two men were arrested. Several days later, a third suspect was tracked down as well. The investigation continues, since the extent of the data theft is unclear and whether the suspects in fact managed to sell the data. Therefore, more arrests are certainly not excluded.

Chair of the Dutch Institute for Vulnerability Disclosure, Victor Gevers, told ZDNet in an interview:

Because people are working from home, they can easily take photos of their screens. This is one of the issues when your administrative staff is working from home.

Many people expressed their disapproval of the insufficient security measures concerning the COVID-19 systems. Since the databases include very sensitive data, the government has a duty to protect these properly in order to prevent criminal misuse. People must be able to rely on their personal data being treated confidentially.

In a press release, the Dutch police also raised awareness of the cybercrime risks, like scam or identity fraud. Moreover, they informed about the possibilities of protection against such crimes and the need to report them. This prevents victims and allows the police to immediately track down suspects and stop their criminal practices.

GDPR fines and data breach reports increased in 2020

12. February 2021

In 2020 a total of €158.5 million in fines were imposed, research by DLA Piper shows. This represents a 39% increase compared to the 20 months the GDPR was previously in force since May 25th, 2018.

Since that date, a total of € 272.5 million in fines have been imposed across Europe under the General Data Protection Regulation (“GDPR”). Italian authorities imposed a total of € 69.3 million, German authorities € 69.1 million, and French authorities 54.4 million. This calculation does not include two fines against Google LLC and Google Ireland Limited totalling € 100 million  (€ 60million + € 40million) and a fine of € 35 million against Amazon Europe Core issued by the French data protection authority “Commission nationale de l’informatique et des libertés” (“CNIL”) on December 10th, 2020, (please see our respective blog post), as proceedings on these fines are pending before the Conseil d’Etat.

A total of 281,000 data breaches were reported during this period, although the countries that imposed the highest fines were not necessarily those where the most data breaches were reported. While Germany and the UK can be found in the top of both lists, with 77,747 data breaches reported in Germany, 30,536 in the UK and 66,527 in the Netherlands, only 5,389 data breaches were reported in France and only 3,460 in Italy.

Although the biggest imposed fine to date still is a fine of € 50 million issued by CNIL against Google LLC in January 2019 (please see our respective blog post) a number of high-profile fines were imposed in 2020, with 6 of the top 10 all time fines being issued in 2020 and one in 2021.

1. H&M Hennes & Mauritz Online Shop A.B. & Co. KG was fined € 35 million for monitoring several hundred employees (please see our respective blog post).

2. TIM (Italian telecommunications operator) was fined € 27 million for making unwanted promotion calls.

3. British Airways was fined € 22 million for failing to protect personal and financial data of more than 400,000 customers (please see our blog post)

4. Marriott International was fined € 20 million for a data breach affecting up to 383 million customers (please see our respective blog post)

5. Wind Tre S.p.A. was fined € 17 million for unsolicited marketing communications.

A comparison of the highest fines shows that most of them were imposed due to an insufficient legal basis for the processing of personal data (Art. 5 & 6 GDPR) or due to insufficient technical and organizational measures to ensure an appropriate level of security (Art. 32 GDPR).

While the European authorities have shown their willingness to enforce the GDPR rules, they have also shown leniency due to the impact that the COVID 19 pandemic has had on businesses. At least in part due to the impact of the pandemic, the penalties planned by the UK ICO have been softened. A planned fine of €205 million for British Airways was reduced to €22 million and a planned fine of €110 million for Marriott International was reduced to €20 million. GDPR investigations are also often lengthy and contentious, so the increased fines may in part be due to more investigations having had sufficient time to be completed. For example, the dispute over the above fines for British Airways and Marriott International has already started in 2019.

Not only the fines but also the number of data breach notifications increased in 2020. In 2020 121,165 data breaches were reported, an average of 331 notifications per day, compared to 278 per day in 2019. In terms of reported data breaches per 100,000 inhabitants, there is a stark contrast between Northern and Southern European countries. In 2020, Denmark recorded 155.6 data breaches per 100,000 inhabitants, the Netherlands 150, Ireland 127.8, while Greece, Italy and Croatia reported the lowest number of data breaches per inhabitant.

The trend shows that the GDPR is being taken more and more seriously by companies and authorities, and this trend is likely to continue as authorities become more confident in enforcing the GDPR. Fines are only likely to increase, especially as none of the fines imposed so far even come close to the maximum possible amount of 4% of a company’s global annual turnover. The figures also show that while the laws are in principle the same and are supposed to be applied the same in all EEA countries, nations have different approaches to interpreting and implementing them. In the near future, we can expect to see the first penalties resulting from the GDPR restrictions on data transfers to third countries, especially in the aftermath of the Schrems II ruling on data transfers to the USA.

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