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[ISN] Make vendors liable for exploits

http://www.theregister.co.uk/2008/03/10/security_economics/

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
attacks.

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
paper.

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
competitors.

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 Böhme 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. ®



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