MIRLN --- 15 April - 5 May 2018 (v21.06)

MIRLN --- 15 April - 5 May 2018 (v21.06) --- by Vince Polley and KnowConnect PLLC (supplemented by related Tweets: @vpolley #mirln)

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ANNOUNCEMENTS | NEWS | RESOURCES | LOOKING BACK | NOTES

ANNOUNCEMENTS

Join me in Washington, D.C. on May 9-10 at the ABA’s Internet of Things National Institute. Conference keynotes include US Sen. Mark Warner and Rep. Jerry McNerney (who introduced the Securing IoT Act), Rep. Robin Kelly (Ranking Member of the Subcommittee on Information Technology), Commerce Department GC Peter Davidson, and former FTC Commissioner Terrell McSweeny. DC Bar ABA members get a discount with DCBAR2018iot . Learn more here: ambar.org/iot2018

NEWS

Oil and gas cybersecurity projects went ‘to the bottom of the pile’ in energy slump (Houston Chronicle, 12 April 2018) - Oil companies put cybersecurity initiatives on hold while crude prices languished at multi-year lows in 2015 and 2016, falling behind in hardening their systems while state-sponsored hacking groups only got more proficient at probing U.S. energy networks, security experts say. As oil companies cut thousands of jobs and pared back drilling operations in the downturn, cybersecurity teams faced funding shortfalls for projects to secure computer networks that run rigs, pipelines and other oil field assets, increasing pressure for a field already challenged by finite resources and competing priorities. In an oil bust, “projects, capabilities and needs that aren’t exactly on top of mind go to the bottom of the pile,” said Paul Brager Jr., a cybersecurity professional at Houston oil field services firm Baker Hughes, a GE company. But among federal agencies and security professionals called in to respond to online attacks, there’s no longer any doubt foreign adversaries in Russia, Iran and North Korea have planned and executed attacks to plant themselves in U.S. critical infrastructure, which includes pipelines, refineries and petrochemical plants. top

Facebook and Cambridge Analytica (Bruce Schneier, 15 April 2018) - In the wake of the Cambridge Analytica scandal, news articles and commentators have focused on what Facebook knows about us. A lot, it turns out. It collects data from our posts, our likes, our photos, things we type and delete without posting, and things we do while not on Facebook and even when we’re offline. It buys data about us from others. And it can infer even more: our sexual orientation, political beliefs, relationship status, drug use, and other personality traits—even if we didn’t take the personality test that Cambridge Analytica developed. But for every article about Facebook’s creepy stalker behavior, thousands of other companies are breathing a collective sigh of relief that it’s Facebook and not them in the spotlight. Because while Facebook is one of the biggest players in this space, there are thousands of other companies that spy on and manipulate us for profit. Harvard Business School professor Shoshana Zuboff calls it “surveillance capitalism.” And as creepy as Facebook is turning out to be, the entire industry is far creepier. It has existed in secret far too long, and it’s up to lawmakers to force these companies into the public spotlight, where we can all decide if this is how we want society to operate and—if not—what to do about it. There are 2,500 to 4,000 data brokers in the United States whose business is buying and selling our personal data. Last year, Equifax was in the news when hackers stole personal information on 150 million people, including Social Security numbers, birth dates, addresses, and driver’s license numbers. You certainly didn’t give it permission to collect any of that information. Equifax is one of those thousands of data brokers, most of them you’ve never heard of, selling your personal information without your knowledge or consent to pretty much anyone who will pay for it. Surveillance capitalism takes this one step further. Companies like Facebook and Google offer you free services in exchange for your data. Google’s surveillance isn’t in the news, but it’s startlingly intimate. We never lie to our search engines. Our interests and curiosities, hopes and fears, desires and sexual proclivities, are all collected and saved. Add to that the websites we visit that Google tracks through its advertising network, our Gmail accounts, our movements via Google Maps, and what it can collect from our smartphones. That phone is probably the most intimate surveillance device ever invented. It tracks our location continuously, so it knows where we live, where we work, and where we spend our time. It’s the first and last thing we check in a day, so it knows when we wake up and when we go to sleep. We all have one, so it knows who we sleep with. Uber used just some of that information to detect one-night stands; your smartphone provider and any app you allow to collect location data knows a lot more. Surveillance capitalism drives much of the internet. It’s behind most of the “free” services, and many of the paid ones as well. Its goal is psychological manipulation, in the form of personalized advertising to persuade you to buy something or do something, like vote for a candidate. And while the individualized profile-driven manipulation exposed by Cambridge Analytica feels abhorrent, it’s really no different from what every company wants in the end. This is why all your personal information is collected, and this is why it is so valuable. Companies that can understand it can use it against you. * * * [ Polley : Good perspective.] top

OLPC’s $100 laptop was going to change the world - then it all went wrong (The Verge, 16 April 2018) - It was supposed to be the laptop that saved the world. In late 2005, tech visionary and MIT Media Lab founder Nicholas Negroponte pulled the cloth cover off a small green computer with a bright yellow crank. The device was the first working prototype for Negroponte’s new nonprofit One Laptop Per Child, dubbed “the green machine” or simply “the $100 laptop.” And it was like nothing that Negroponte’s audience - at either his panel at a UN-sponsored tech summit in Tunis, or around the globe - had ever seen. After UN Secretary-General Kofi Annan offered a glowing introduction, Negroponte explained exactly why. The $100 laptop would have all the features of an ordinary computer but require so little electricity that a child could power it with a hand crank. It would be rugged enough for children to use anywhere, instead of being limited to schools. Mesh networking would let one laptop extend a single internet connection to many others. A Linux-based operating system would give kids total access to the computer - OLPC had reportedly turned down an offer of free Mac OS X licenses from Steve Jobs. And as its name suggested, the laptop would cost only $100, at a time when its competitors cost $1,000 or more. Then, Negroponte and Annan rose for a photo-op with two OLPC laptops, and reporters urged them to demonstrate the machines’ distinctive cranks. Annan’s crank handle fell off almost immediately. As he quietly reattached it, Negroponte managed half a turn before hitting the flat surface of the table. He awkwardly raised the laptop a few inches, trying to make space for a full rotation. “Maybe afterwards…” he trailed off, before sitting back down to field questions from the crowd. The moment was brief, but it perfectly foreshadowed how critics would see One Laptop Per Child a few years later: as a flashy, clever, and idealistic project that shattered at its first brush with reality. If you remember the OLPC at all, you probably remember the hand crank. It was OLPC’s most striking technological innovation - and it was pure vaporware. Designers dropped the feature almost immediately after Negroponte’s announcement, because the winding process put stress on the laptop’s body and demanded energy that kids in very poor areas couldn’t spare. * * * top

Virtual annual meetings: updated “best practices” (CorporateCounsel.net, 16 April 2018) - Like it did back in 2012, Broadridge recently convened a group of 17 different stakeholders to look at the state of virtual annual meetings - both “virtual only” and hybrid. The end product is this set of “ Principles & Best Practices for Virtual Annual Meetings. “ Like before, the report’s conclusions are not that profound - but can be useful to help guide those considering virtual meetings (and it includes a useful appendix that summarizes each state’s laws governing electronic participation in shareholder meetings). top

Cybersecurity standards for private companies: Taking notes from the SEC’s public company guidance (Nixon Peabody, 18 April 2018) - The Securities and Exchange Commission ("SEC") recently updated and expanded its guidance to public companies on cybersecurity risks and incidents in its “ Commission Statement and Guidance on Public Company Cybersecurity Disclosures “ (the “2018 Guidance"). The 2018 Guidance represents a broad recognition of the critical role that cybersecurity plays in the health of companies and the stability of markets. “There is no doubt that the cybersecurity landscape and the risks associated with it continue to evolve,” said a statement released by SEC Chairman Jay Clayton . “Public companies must stay focused on these issues and take all required action to inform investors about material cybersecurity risks and incidents in a timely fashion.” To support this effort, the SEC has created a cybersecurity website with helpful alerts and bulletins, compliance toolkits, and educational resources. In addition, the Unit charged with targeting a wide range of cyber-related misconduct, such as market manipulation through the spread of false information, hacking, and intrusions and attacks on trading platforms and market infrastructure. While a private company can be reassured that a member of the Cyber Unit will not show up at its door, the 2018 Guidance offers useful insights about the evolving risks in the digital marketplace, as well as effective controls and procedures to manage these risks-all of which can inform a private company that must navigate similar pitfalls in the modern e-commerce environment. Cybersecurity is, as the SEC’s website states, “a responsibility of every market participant.” To that end, the following are some key takeaways for private companies from the 2018 Guidance: * * * top

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Cybersecurity: NIST’s new framework (Version 1.1) (CorporateCounsel.net, 20 April 2018) - Recently, NIST released an updated cybersecurity framework . This popular framework is entitled “Version 1.1” rather than the “2.0” that some have been calling it (including us) when the proposal was released last year. Here’s an excerpt from this Wachtell Lipton memo : The updated Framework, entitled Version 1.1, is intended to clarify and refine (rather than replace) NIST’s original 2014 Cybersecurity Framework, Version 1.0, and builds on the original version’s five core cybersecurity functions-Identify, Protect, Detect, Respond, and Recover-and tiered implementation system. Instead of a “one-size-fits-all” approach, the Framework continues to be a flexible platform that can be customized to address the particular cybersecurity risks faced by any company. Of broader import, the updated Framework encourages companies to integrate cybersecurity objectives into strategic planning and governance structures and to ensure that cybersecurity is a central part of overall risk management. In terms of other specific changes, Version 1.1 provides new guidance on how to use the Framework to conduct self-assessments of internal and third-party cybersecurity risks and mitigation strategies, includes an expanded discussion of how to manage cyber risks associated with third parties and supply chains, advances new standards for authentication and identity proofing protocols, and addresses how to apply the Framework to a wide range of contexts, such as industrial controls, the use of off-the-shelf software, and the Internet of Things. top

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New standard accepted by Federal Energy Regulatory Commission for critical infrastructure protection (SC Media, 23 April 2018) - The Federal Energy Regulatory Commission (FERC) approved a new standard to improve electronic access controls to low impact Bulk Electronic Systems (BES), mandatory security controls for mobile devices and develop modifications to critical infrastructure protection (CIP) reliability standards. Work on the new standard began in October 2017 when FERC asked NERC to clarify electronic access controls, adopt mandatory requirements for transient electronic devices and to require the creation of a response policy in case of a system threat. The genesis of this request comes from a group of bipartisan bills that were advanced out of the House Energy and Commerce subcommittee to improve the government’s response to cybersecurity attacks on the electric grid. Particularly against less critical facilities. “CIP-003-7 pushes forward on FERC’s concern that even the less critical assets covered by these standards (referred to as low impact facilities) present risks to the bulk electric system that need to be addressed,” said Daniel Skees, a partner at the law firm Morgan Lewis. Skees represents electric utilities before FERC. FERC officially approved the new CIP reliability standard CIP-003-7 (Cybersecurity Security Management Controls that were submitted by the North American Electric Reliability Corporation (NERC). By accepting the standard NERC is tasked with implementing the new standards. FERC noted that the new rules developed by NERC improve upon the prior CIP reliability standards by clarifying the obligations pertaining to electronic access control for low impact BES Cyber Systems, adopting mandatory security controls for transient electronic devices such as thumb drives, laptop computers, and other portable devices used frequently with a low impact BES Cyber Systems; and for adding the requirement to have responsible entities have in place a policy for declaring and responding to CIP Exceptional Circumstances related to low impact BES Cyber Systems. top

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BSA releases international cybersecurity framework to promote strong and consistent cybersecurity governance (BSA, 25 April 2018) - The Software Alliance released an International Cybersecurity Policy Framework to serve as a tool both for policymakers considering foundational cybersecurity legislation and for those examining gaps and shortfalls in existing policies. top

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DOD releases new guidance giving teeth to cybersecurity rules to protect data within the supply chain (CSO, 30 April 2018) - The US Department of Defense issued new guidance on how it might penalize business partners that do not adequately adhere to new security rules codified in NIST SP 800-171. NIST has prescribed a set of 110 security requirements that are derived from a larger standard called NIST SP 800-53 that governs cybersecurity standards for government systems. December 31, 2017 was the designated deadline for implementing the controls as part of DFARS 252.204-7012 to protect confidential unclassified information (CUI). To facilitate gradual adoption, DoD allowed businesses to specify a future date for implementing security controls through the Plan of Actions & Milestones (POAM) artifact. Many organizations have resorted to “POAM’ing” requirements in a checkbox exercise and generated System Security Plans that are very light and do not adequately describe the security posture of the vendor. The new DOD guidance for reviewing system security plans and the NIST SP 800-171 security requirements not yet implemented assigns risk scores to controls. Security controls that are deemed high risk and have not been implemented pose a continued risk to the government. The latest guidance helps ensure that businesses can assess and prioritize how they wish to go about implementing the 110 security controls. The new guidance also provides specific information on the downsides of not implementing the new security controls. The “Assessing the State of a Contractor’s Internal Information System in a Procurement Action” document outlines the specific conditions during the request for proposals (rfp), source selection and subsequent contract award that will looked at by government officials related to NIST SP 800-171 compliance. top

Facebook moves 1.5bn users out of reach of new European privacy law (The Guardian, 19 April 2018) - Facebook has moved more than 1.5 billion users out of reach of European privacy law, despite a promise from Mark Zuckerberg to apply the “spirit” of the legislation globally. In a tweak to its terms and conditions, Facebook is shifting the responsibility for all users outside the US, Canada and the EU from its international HQ in Ireland to its main offices in California. It means that those users will now be on a site governed by US law rather than Irish law. The shift highlights the cautious phrasing Facebook has applied to its promises around GDPR. Earlier this month , when asked whether his company would promise GDPR protections to its users worldwide, Zuckerberg demurred. “We’re still nailing down details on this, but it should directionally be, in spirit, the whole thing,” he said. A week later, during his hearings in front of the US Congress, Zuckerberg was again asked if he would promise that GDPR’s protections would apply to all Facebook users. His answer was affirmative - but only referred to GDPR “controls”, rather than “protections”. Worldwide, Facebook has rolled out a suite of tools to let users exercise their rights under GDPR, such as downloading and deleting data, and the company’s new consent-gathering controls are similarly universal. top

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Survey reveals that many companies are behind schedule to achieve Global Data Protection Regulation compliance (McDermott Will & Emery, 20 April 2018) - A major survey sponsored by international law firm McDermott Will & Emery and carried out by the Ponemon Institute has revealed that many companies are behind schedule to achieve Global Data Protection Regulation (GDPR) compliance by the looming May deadline. The survey results show that 40% of companies only expect to achieve compliance with the regulation after May 25th when the Regulation comes into effect. The McDermott-Ponemon study surveyed companies across the US and Europe on their understanding of the impact of GDPR and their readiness for it. Key findings of this important benchmark survey are: * * * [ Polley : thorough report , as usual. I was surprised how un-ready so many organizations are - it’s almost laughable. Reminds me of how long organizations were running without full compliance with the DPD, dating from 1995.] top

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Here’s why you’re getting all those terms of service update emails (Mashable, 25 April 2018) - Get the feeling you’re suddenly being bombarded with emails from companies about updated terms of service policies? You are. And there’s a good reason: the European Union’s forthcoming efforts to protect our personal data. And though the law is based in the EU, the GDPR has a worldwide impact because any global online company that collects data from someone living in the EU will be held accountable. While the specific updates made to each terms of service policy will be individual to every company, the law expands the definition of what information is considered personal data. This means companies will likely be adjusting their privacy policies to inform users that less basic information such as IP addresses, location data, web browsing cookies, and other details are also defined as personal data. Though the new internet regulations don’t go into effect until May 25, 2018, companies like Facebook, Instagram, Google, and more, are starting to prepare by updating their terms of services and privacy policies now. top

Federal judge adopts CFTC position that cryptocurrencies are commodities (ABA’s Business Law Today, 20 April 2018) - A New York federal judge held that virtual currencies are commodities that can be regulated by the Commodity Futures Trading Commission ("CFTC"), enjoining the defendants, an individual and affiliated entity, from trading cryptocurrencies on their own or others’ behalf or soliciting funds from others, and ordering an expedited accounting. CFTC v. McDonnell , No. 18-cv-0361, Dkt. 29 (E.D.N.Y. Filed Jan 18, 2018). While the CFTC announced its position that cryptocurrencies are commodities in 2015, this case marks the first time a court has weighed in on whether cryptocurrencies are commodities. Having answered that question in the affirmative, the court went on to hold that the CFTC has jurisdictional authority over defendants’ alleged cryptocurrency fraud under 7 U.S.C. § 9(1), which permits the CFTC to regulate fraud and manipulation in underlying commodity spot markets. top

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Goldman Sachs to open a bitcoin trading operation (NYT, 2 May 2018) - Most big banks have tried to stay far away from the scandal-tainted virtual currency Bitcoin. But Goldman Sachs, perhaps the most storied name in finance, is bucking the risks and moving ahead with plans to set up what appears to be the first Bitcoin trading operation at a Wall Street bank. In a step that is likely to lend legitimacy to virtual currencies - and create new concerns for Goldman - the bank is about to begin using its own money to trade with clients in a variety of contracts linked to the price of Bitcoin. While Goldman will not initially be buying and selling actual Bitcoins , a team at the bank is looking at going in that direction if it can get regulatory approval and figure out how to deal with the additional risks associated with holding the virtual currency. * * * Over the last two years a growing number of hedge funds and other large investors around the world have expressed an interest in virtual currencies. Tech companies like Square have begun offering Bitcoin services to their customers, and the commodity exchanges in Chicago started allowing customers to trade Bitcoin futures contracts in December. But until now, regulated financial institutions have steered clear of Bitcoin, with some going so far as to shut down the accounts of customers who traded Bitcoin. Jamie Dimon, the chief executive of JPMorgan Chase, famously called it a fraud, and many other bank chief executives have said Bitcoin is nothing more than a speculative bubble. top

Abbott issues software patches for more cardiac devices (Gov Info Security, 20 April 2018) - Abbott Laboratories has issued software updates for certain implantable cardiac devices to address cybersecurity flaws and battery issues that pose potential safety risks to patients. The products were previously sold by device maker St. Jude Medical, which Abbott acquired last year. More than 382,000 of these affected devices are distributed in the U.S., including 350,000 devices that are currently implanted in patients, according to the Food and Drug Administration and Abbott. The remainder of the devices are in inventories and will be updated “in-box,” an Abbott spokeswoman says. The device problems were also the subject of previous warnings by the FDA and the Department of Homeland Security’s Industrial Control Systems Cyber Emergency Response Team , which both issued new advisories on April 17 about the availability of the Abbott software patches. The impacted devices include certain families of Abbott implantable cardioverter defibrillators and cardiac resynchronization therapy defibrillators, which are devices that provide pacing for slow heart rhythms and electrical shock or pacing to stop dangerously fast heart rhythms, the FDA notes in its alert. Last August, Abbott also issued software updates to address similar cybersecurity vulnerabilities in certain implantable cardiac pacemaker devices (see A FDA First: Cyber Recall for Implantable Devices ). top

Newly disclosed documents on the Five Eyes Alliance and what they tell us about intelligence-sharing agreements (Lawfare, 23 April 2018) - The United States is party to a number of international intelligence sharing arrangements-one of the most prominent being the so-called “Five Eyes” alliance. Born from spying arrangements forged during World War II, the Five Eyes alliance facilitates the sharing of signals intelligence among the U.S., the U.K., Australia, Canada and New Zealand. The Five Eyes countries agree to exchange by default all signals intelligence they gather, as well as methods and techniques related to signals intelligence operations. When the Five Eyes first agreed to this exchange of intelligence-before the first transatlantic telephone cable was laid-they could hardly have anticipated the technological advances that awaited them. Yet, we remain in the dark about the current legal framework governing intelligence sharing among the Five Eyes, including the types of information that the U.S. government accesses and the rules that govern U.S. intelligence agencies’ access to and dissemination of Americans’ private communications and data. In July 2017, Privacy International and Yale Law School’s Media Freedom & Information Access Clinic filed a lawsuit against the National Security Agency, the Office of the Director of National Intelligence, the State Department, and the National Archives and Records Administration seeking access to records related to the Five Eyes alliance under the Freedom of Information Act. Over the past few months, we have begun to receive limited disclosure from the NSA and the State Department. While we have not seen the text of the current agreement-as well as other records that would shed important light on how the agreement operates-the disclosures to date give us insight into the nature and scope of U.S. intelligence sharing agreements. Below, we summarize a few of these disclosures and talk through their implications. In particular, we highlight how, taken together, they suggest that the U.S. government takes an inconsistent approach to legal classification and therefore publication of these types of agreements. We also take a closer look at one agreement-the 1961 General Security Agreement between the Government of the United States and the Government of the United Kingdom-which further illuminates our understanding of the privatization of intelligence activities and provides us with a rare glimpse of the “third party rule,” an obstacle to oversight and accountability of intelligence sharing. top

US regulator fines Altaba $35 million over 2014 Yahoo email hack (Reuters, 24 April 2018) - U.S. regulators fined Altaba Inc, the company formerly known as Yahoo! Inc, $35 million on Tuesday to settle charges that kept its massive 2014 cyber security breach a secret from investors for more than two years. The Securities and Exchange Commission’s case marks the first time it has gone after a company for failing to disclose a cyber security breach. Steven Peikin, co-director the SEC’s enforcement division, said cyber breaches were a priority for the agency and hoped companies facing similar issues would take note. top

How hackers could cause chaos on America’s roads and railways (Pew Trusts, 24 April 2018) - When hackers struck the Colorado Department of Transportation in a ransomware attack in February and again eight days later, they disrupted the agency’s operations for weeks. State officials had to shut down 2,000 computers, and transportation employees were forced to use pen and paper or their personal devices instead of their work computers. Staffers whose computers were infected didn’t have access to their files or data, unless it was stored on the internet, and the attack affected the payroll system and vendor contracts. It could have been a lot worse: The Colorado hacks didn’t affect traffic signals, cameras or electronic message boards, and state information technology officials, who refused to pay the ransom, said the system had been 95 percent restored as of last week. Transportation systems are ripe targets for cybercriminals, according to cybersecurity experts, and many state and local government officials are only now waking up to the threat and realizing they need to beef up their defenses. In February, Maryland Department of Transportation Secretary Pete Rahn told a meeting of the American Association of State Highway and Transportation Officials that security breaches are a big concern for his agency, which oversees public transit, highways, tolls, a port, an airport and the motor vehicle administration. If hackers get into the network, he said, “they can play with our trains, traffic signals, variable message boards. We’ve never had to think about these things before.” * * * top

Top federal IT contractors leave emails vulnerable to phishing, spoofing (Global Cyber Alliance press release, 25 April 2018) - Only one of the largest federal contractors have fully implemented the top defense against email phishing and spoofing, according to research released today by the Global Cyber Alliance (GCA). In an examination of the top 50 information technology (IT) contractors to the United States government , GCA found that only one contractor is using email-validation security - the Domain-based Message Authentication, Reporting & Conformance (DMARC) protocol - at its highest level. DMARC weeds out fake emails (known as direct domain spoofing) deployed by spammers and phishers targeting the inboxes of workers in all sectors of society. According to the 2017 Symantec ISTR report , 1 in 131 emails contained malware, the highest rate in 5 years. Late last year, the Department of Homeland Security mandated that all federal agencies implement DMARC . Security experts praised DHS and Senator Ron Wyden, who called for agencies to implement DMARC , for pushing government agencies to quickly implement DMARC at the highest level possible. Contractors’ failure to follow suit could make them more enticing to threat actors looking for new ways to access government information. top

Building on sand isn’t stable: Correcting a misunderstanding of the National Academies report on encryption (Lawfare’s Susan Landau, 25 April 2018) - The encryption debate is messy. In any debate that involves technology-encryption, security systems and policy, law enforcement, and national security access-the incomparable complexities and tradeoffs make choices complicated. That’s why getting the facts absolutely right matters. To that end, I’m offering a small, but significant, correction to a post Alan Rozenshtein wrote on Lawfare on March 29. Rozenshtein argued that in opposing an exceptional-access mandate-the ability for law enforcement to access an encrypted communication or locked device with a warrant-the computer-security community had deluded itself into thinking that such systems couldn’t be built securely. As evidence of this, Rozenshtein pointed to the recent National Academies study on the tradeoffs involved in government access to encrypted content. (Note: I served on the study committee.) He wrote that the report made an important point that many missed: “High-level experts in the information-security community itself are trying to build secure third-party-access systems.” But this is not what the report said. The Academies report does discuss approaches to “building ... secure systems” that provide exceptional access-but these are initial approaches only. The report states as much in writing that computer scientists have “begun to explore” this area of research. The presentations to the Academies committee were brief descriptions of ideas by three smart computer scientists, not detailed architectures of how such systems would work. There’s a huge difference between a sketch of an idea and an actual implementation-Leonardo da Vinci’s drawings for a flying machine as opposed to the Wright brothers’ plane at Kitty Hawk. The presentations that the Academies saw are more akin to sketches than a system architecture. None of the three presentations involved anything more than the thoughts of a single individual. The study did not hear presentations about engineering teams “trying to build secure third-party-access systems"-there is no such effort at present. (This does not include key-recovery solutions such as those provided in Apple’s FileVault or Microsoft’s BitLocker ; these solve a different problem from the “going dark” issue.) An exceptional-access system is not merely a complex mathematical design for a cryptosystem; it is a systems design for a complex engineering task. * * * [ Polley : pretty interesting post, and Landau is quite expert in this field.] top

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Encryption policy and its international impacts: A framework for understanding extraterritorial ripple effects (Lawfare, 2 May 2018) - Encryption technologies play a complicated role in today’s connected, mobile, data-driven world. My colleagues, Herbert Burkert and Urs Gasser, and I have written a paper offering a conceptual framework that can help policy-makers better understand and anticipate the international ramifications of domestic encryption policies. There is no doubt that encryption has enabled our digital economy, securing everything from online commerce, financial transactions, connected devices, and more. At the same time, examples abound of concerns from law enforcement and intelligence agencies that encryption technologies are making it harder to address crime and terrorism. The 2016 battle between Apple and the FBI over the availability of essentially unbreakable encryption on consumer devices like the iPhone is perhaps the most public, but far from the only example of the complex challenges that encryption poses for legislators, law enforcement agencies, national security agencies, and other policymakers. In response to these technological and legal challenges, decisionmakers and leaders of all kinds-legislators, regulators, intelligence and law enforcement agencies, and companies-are increasingly faced with difficult decisions that ultimately have both direct and indirect impacts on the effectiveness and availability of encryption tools. For example, legislators might mandate the inclusion of so-called “backdoors” in consumer devices, regulators might only allow the government to purchase technologies that meet minimum levels of security, intelligence agencies might attempt to influence encryption technical standards in ways that are beneficial to intelligence gathering, and companies might make encryption a default in their products. Collectively, choices like these effectively define a country’s encryption “policy.” It is not one law or a regulation, but instead the cumulative impact of each (sometimes conflicting) decision that affects the availability and effectiveness of encryption technologies. The challenge for such decisionmakers is that although the domestic impacts of such individual decisions are often intended and predictable, the international implications are often both unintentional and poorly understood. The purpose of this paper is to help policymakers better anticipate the numerous global ramifications, including those that can undermine the intent of the original policy. top

Equifax data breach cost hits $242 million (SC Magazine, 26 April 2018) - The massive data breach that compromised the data of 147.9 million Equifax customers last year has cost the company more than $242 million in related expenses, but luckily for the company, much of this cost has been covered by its cybersecurity insurance. Equifax noted the expenditures in its first-quarter financial report . The total tally for the breach since it became public in September has been $242.7 million with $78.7 million in pre-tax expenses being spent during the first quarter, ended March 30. This included $45.7 million in IT and security costs to transform the company’s IT infrastructure and improve application, network, and data security, and the costs of development and launch of Lock and Alert. Another $28.9 million was spent during the quarter on legal and investigative fees and $4.1 million on product liability costs include the expected costs of fulfillment of TrustedID Premier and support of consumers using TrustedID Premier. In the financial filing, Equifax said it carries $125 million in cybersecurity insurance, with a $7.5 million deductible and has so far received $60 million in payments from its carrier, $10 million was received during the first quarter. top

25 years ago today, the web opened up and the world changed (Fast Company, 30 April 2018) - On April 30, 1993, CERN-the European Organization for Nuclear Research-announced that it was putting a piece of software developed by one of its researchers, Tim Berners-Lee, into the public domain. That software was a “global computer networked information system” called the World Wide Web, and CERN’s decision meant that anyone, anywhere, could run a website and do anything with it. In an era when online services were still dominated by proprietary, for-profit walled gardens such as AOL and CompuServe, that was a radical idea. top

Facebook says it will let users remove data from outside sites (Axios, 1 May 2018) - Facebook said Tuesday that in the coming months it would let users see and wipe the data fed into its ad targeting system by outside websites and applications. Why it matters : Facebook is grappling with a data privacy reckoning after the Cambridge Analytica scandal focused a spotlight on its relations with external developers. What they’re saying : “This feature will enable you to see the websites and apps that send us information when you use them, delete this information from your account, and turn off our ability to store it associated with your account going forward,” said Erin Egan, who the company recently said would focus full-time on her role as Chief Privacy Officer. If a user deletes this information, it will no longer be associated with their account - although Facebook says it will continue to give outside parties broad analytics reports. Facebook founder and chief executive Mark Zuckerberg called the new control a “Clear History” option, similar to what web browsers offer, and said in a post that when users take advantage of it, “Facebook won’t be as good while it relearns your preferences.” [ see also Facebook’s Zuckerberg unveils privacy tool ‘clear history’ (CNET, 1 May 2018)] top

Under the Foreign Sovereign Immunities Act, where do hacking torts happen? (Lawfare, 1 May 2018) - The Democratic National Committee’s lawsuit against the Russian Federation will run aground, as Ingrid Wuerth notes , unless the DNC can find a way around Russia’s immunity in American courts. In that respect, the suit raises a question on which precedent remains thin: whether allegations of state-sponsored hacking can fit through the Foreign Sovereign Immunities Act exception for cases that involve “personal injury or death, or damage to or loss of property, occurring in the United States and caused by the tortious act or omission of the foreign state.” That provision, the noncommercial tort exception, was written primarily to address traffic accidents, as the Supreme Court noted in Argentine Republic v. Amerada Hess . Very few plaintiffs have attempted to invoke it in challenges to nation-state spying, and the case most squarely on point-the D.C. Circuit’s 2017 decision in Doe v. Federal Democratic Republic of Ethiopia -suggests that the DNC will face an uphill battle. But as I recently argued in a case comment for the Harvard Law Review, and as this post summarizes, there are reasons for the Southern District of New York to think carefully before following Doe . top

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The digital vigilantes who hack back (The New Yorker, 7 May 2018) - American companies that fall victim to data breaches want to retaliate against the culprits. But can they do so without breaking the law? [ Polley : worth a close read; very interesting.] top

Data breach that revealed client file sparks legal malpractice action (New Jersey Law Journal, 1 May 2018) - A matrimonial attorney and her firm are facing a malpractice suit in state Superior Court in Morris County, New Jersey , after litigation over a divorce was disrupted by a data breach . top

Pirate radio stations explode on YouTube (NYT, 3 May 2018) - Luke Pritchard and Jonny Laxton were 13 when they met at a boarding school in Crowthorne, England, in 2011. They bonded over a shared love of underground music and in 2014 started a YouTube channel, College Music , to promote the artists they liked. At first, the channel grew slowly. Then, in the spring of 2016, Mr. Pritchard discovered 24/7 live-streaming, a feature that allows YouTube’s users to broadcast a single video continuously. College Music had 794 subscribers in April 2015, a year before Mr. Pritchard and Mr. Laxton started streaming. A month after they began, they had more than 18,440. In April 2016, they had 98,110 subscribers and as of last month, with three active live streams, they have more than triple that amount, with 334,000. They make about $5,000 a month from the streams. The boys stumbled upon a new strategy, one that, in the past two years, has helped a certain kind of YouTube channel achieve widespread popularity. Hundreds of independently run channels have begun to stream music nonstop, with videos that combine playlists with hundreds of songs and short, looped animations, often taken from anime films without copyright permission. * * * The channels occupy a precarious space between YouTube’s algorithm and its copyright policing, drawing comparisons to the unlicensed pirate radio stations of the 20th century , recreated in the digital sphere. Many of the channels blink in and out of existence within a week, but their presence has become a compelling part of the site’s musical ecosystem. And while competitors like Spotify are gaining, YouTube still dominates the streaming world, Report from the International Federation of the Phonographic Industry. top

RESOURCES

A fantastic chart on the admissibility of electronic evidence (RideTheLightning, 24 April 2018) - Thanks to my friend Craig Ball for a “Christmas in April” gift of a splendid post onthe admissibility of electronic evidence and a related chart shared with him by U.S. District Judge Paul Grimm and Kevin Brady, who is Of Counsel to Redgrave LLP. The chart is beautifully designed and easy to use. It covers authentication, relevance, hearsay exceptions and the Best Evidence rule. top

Distributed Stock Ledgers and Delaware Law (ABA’s The Business Lawyer, April 2018) - Effective August 1, 2017, the Delaware General Corporation Law (the “DGCL") now authorizes Delaware corporations to use blockchain technology to maintain stock ledgers and communicate with stockholders. Consistent with the DGCL’s status as an enabling act that facilitates private ordering, the blockchain amendments are permissive. In the near term, they create a foundation for a technology ecosystem by removing any uncertainty about the validity of shares that have been issued or are maintained using blockchain technology. Over a longer time horizon, the amendments foreshadow a more flexible, dynamic, and digital future in which distributed ledger technology and smart contracts play major roles. top

LOOKING BACK - MIRLN TEN YEARS AGO

(note: link-rot has affected about 50% of these original URLs)

The internet’s 100 oldest dot-com domains (PC World, 21 Dec 2008) - The Internet’s been around in some form for decades. It wasn’t until the mid-80s, though, that the Web as we know it started coming together—and those precious dot-com domains started getting snatched up. As we finish out the tech-centric year of 2008, we thought we’d take a look back at the Internet’s oldest commercial Web sites—the ones registered back when chatting about “the Net” was as socially acceptable as wearing Jedi garb into a crowded nightclub. So grab your light sabers, dear friends—we’re boarding the Millennium Falcon and heading back to a virtual galaxy far, far away. [ Polley in 2008: Schlumberger was number 75 on May 20, 1987.] top

AT&T mulls watching you surf (New York Times, 14 August 2008) - AT&T is “carefully considering” monitoring the Web-surfing activities of customers who use its Internet service, the company said in a letter in response to an inquiry from the House Committee on Energy and Commerce. While the company said it hadn’t tested such a system for monitoring display advertising viewing habits or committed to a particular technology, it expressed much more interest in the approach than the other big Internet providers who also responded to the committee’s letter. AT&T did however promise that if it does decide to start tracking its customers online, it will “do so the right way.” In particular, the advertising system will require customers to affirmatively agree to have their surfing monitored. This sort of “opt-in” approach is preferred by privacy experts to the “opt-out” method, practiced by most ad targeting companies today, which records the behavior of anyone who doesn’t explicitly ask to not to be tracked. top