Apathy Let Cambridge Analytica Abuse 50 million Facebook Accounts

It was revealed last week that Cambridge Analytica abused personal information from 50 million Facebook accounts in early 2014 to build a system to profile individual American voters for the 2016 presidential election. The goal was to then target the users with personalised political advertisements attacking Hilary Clinton and loving The Donald. It’s still not clear whether this was illegal or merely repugnant.

Most people are focussing on the fact that Cambridge Analytica was headed at the time by Steve Bannon, which provides yet another malodorous link to Trump. Facebook’s share price is down about 12% but so far there has been no accountability apart from the inevitable class action litigation lawyers circling. What matters the most here is that we are becoming de-sensitized to data breaches like this.

$300M of Etherium permanently lost. Hey, it’s just crypto and it wasn’t mine, so who cares?

Do you know anyone who lost sleep over 143 million Americans and 100,000 Canadians that were exposed by Equifax’s massive data breach.

Every Yahoo account was compromised in 2013, which Yahoo did not figure out until 2017. That was 3 billion accounts. You likely had one of those accounts. Did you complain about it?

Citibank failed to protect the personal data (including birthdates and Social Security numbers) of approximately 146,000 customers who filed for bankruptcy between 2007 and 2011. That’s adding insult to injury.

40 million Target customers were exposed in 2013. The remedial cost to Target, not including the class action litigation, was roughly $252M. Did you join the class to get your rightful piece of the settlement?

$81 million stolen from the Bank of Bangladesh by compromising the Swift system in 2016. This was the second time Swift was used as a medium of theft. But hey, that could never happen over here in the civilized world, right?

Look at the lists here and here and here for some of the largest data breaches of all time. How many of these do you remember, or care about?

Even worse, according to the Online Trust Alliance in its terrifying Cybersecurity and Breach Trends Report from January of this year, is that 93% of these breaches were self-inflicted and easily preventable. Apathy is our real enemy.

And next up are the assaults from Artificial Intelligence.

AI spans a broad area. A Nest WiFi-enabled thermostat can self-regulate if it feels the sun directly on it rather than air in the home environment – is that ‘intelligent’ or just good programming? Cruise control on your car? A video game that gets harder the further you go and that learns your favourite moves? Neural networks? Deep learning? The hated robo-advisor? Predictive weather analysis? Smart tokens in the ICO universe?

AI is just a software operating in a hardware environment, but somehow it has gained noble status. Perhaps it’s the use of the word “intelligence” that lulls us into thinking that the software is actually alive.

It’s not. It’s just software, a compendium of zeros and ones that open and close circuits inside chips. Software is vulnerable to coding errors, intentional or negligent. It’s vulnerable to breakdowns in its hardware. And it’s entirely vulnerable to malicious third parties for cryptojacking.

Our courts and insurers will have to address who becomes liable when those things go wrong. The worse situation is where software causes death, like earlier this week when a self-driving car killed a woman in Tempe, Arizona. Elaine Herzberg was walking her bicycle when she was hit by a vehicle in autonomous mode going 40 km/h. It doesn’t take a crystal ball to see Mr. Herzberg is the first of many such deaths.

Who will carry the financial burden of the error when smart tokens co-ordinate a contract for one billion rolls of toilet paper when the intention was for 100 rolls of paper towel? Is this contract law or negligence? Can you contract out of liability? Medical diagnostic software misses an obvious cause resulting in patient death? Who pays the repair bills when Skynet finally goes live and the Terminator kicks in your door?

Vernor Vinge’s 1993 short paper The Coming Tehnological Singularity is a marvel of literature that manages to inspire and terrify at the same time. Should something we created actually develop its own intelligence, the pace at which technology would from that point develop would be inconceivable to humans. The human era would be over.

Back to the breaches, both malicious and self-inflicted. Incompetence and thievery have been with humanity for recorded history. The first trojan horse was the serpent surreptitiously attacking the Old Testament God by way of his human creations and an apple. Sadly, we do need various levels of government to help us defend ourselves. This will require some levels of regulation, even if unwanted.

The CryptoCrowd may not like it, but regulation is needed and it’s coming. At least there seems to be some regulatory recognition that data is a different world requiring a different set of regulatory parameters. See for example the British Columbia Securities Commission’s 2018 outreach efforts seeking innovation while maintaining confidence in the capital markets.

This apathy is a strange mindset, especially since the business world otherwise takes confidentiality seriously. We sign confidentiality agreements and NDA’s. We expect our employees to leave our IP at the office. Securities laws exist to prevent insider trading and to protect the dignity of the market. Larger boards have committees specializing in privacy and data protection. There are few things more valuable to any company than the integrity of its data.

So we should be outraged by these ongoing assaults on us, our data and our companies. We should be in the streets, with torches and pitchforks, demanding that heads roll and attackers be found. Instead, we shrug and say “What can we do? I’m just one helpless person. The government will protect us.” That only goes so far.

We have to use what the government gives us. CASL (Canada’s AntiSpam Legislation) is a horribly mis-named piece of legislation that has teeth. It codifies an individual’s right to control the inbox. It isn’t about spam, it’s about your digital liberty.

The GDPR is the European Union’s approach, and it’s a good one. A prior article explaining GDPR is here. Recent recommendations from House of Commons Standing Committee on Access to Information, Privacy and Ethics indicate that Canada will adopt an approach similar to GDPR to give you the tools to protect yourself. So use them.

Ultimately, it’s up to you. Be vigilant. Protect your local network. Follow good protocols. Don’t be sloppy. And be angry over every breach. Demand accountability. Next time it could be you.




GDPR – Big Data and The Right to be Forgotten

The Internet of Things enables Big Data to suck at our daily lives. Every day brings another story of another data breach, of a hack, a personal information gone missing, of ransomware, of negligent data handling. Countering that, the evolution of blockchain and the anonymity of cryptocurrencies show that the populace does not want to be tracked and does want to keep personal data safe.

Whether it’s securities commissions overseeing the issuance and trading of crypto coins, or Canada’s Anti-Spam Legislation (CASL) governing electronic communications, governments have many tools in the toolbox to regulate data. The European Union is taking a different approach and swinging a much bigger hammer.

The European Union is using GDPR to push back at Big Data’s constant assault on individual privacy rights. General Data Protection Regulation (GDPR) imposes a positive duty on businesses to protect the personal data of EU citizens for transactions that occur within EU member states and it limits the exportation of personal data outside the EU. It affects any business doing business anywhere in the EU, regardless of where the business is located globally, with one standard of compliance enforceable across the EU. The rules are pro-consumer with astonishingly high penalties for non-compliance.

GDPR was passed by the European Parliament in April, 2016, after four years of drafting, consultation and research. Enforcement kicks off on May 25 of this year. GDPR’s homepage is here. If your company has any shareholders in the EU, you must learn about GDPR.

Here’s a very high level overview. A business is allowed to collect the absolute minimum amount of data to carry out its business purpose, and it must be accountable to the individuals for the storage and use of that data. GDPR’s definition of what constitutes personal identification information is extremely broad – companies must provide the same levels of protection for simple things like an individual’s IP address or cookies as for more personal items like name, address and biometrics.

GDPR also requires a business to designate a Data Protection Officer (DPO) to oversee data security strategy and GDPR compliance. Among other duties, that DPO must self-report to regulators and individuals affected by a breach within 72 hours of a such breach being detected.

The DPO is also ultimately responsible for enforcing the following rights for every individual:

  • The right to be informed
  • The right of access
  • The right of rectification
  • The right to erasure
  • The right to restrict processing
  • The right to data portability
  • The right to object
  • Rights related to automated decision making and profiling

Of these, I find the Right to Erasure to be the most fascinating. If you were so inclined, you could force every company that has ever dealt with you in the EU to delete all of your personal information from their records, completely, irretrievably, permanently. You have the Right to Be Forgotten. You can erase your digital footprints. This puts the power back in the hands of the consumer, not Big Data.

There is a cost to getting into compliance with GDPR. PwC’s “GDPR Preparedness Pulse Survey” released in January, 2017 found that while 24% of US multinational respondents planned to spend under $1 million for GDPR preparations, 68% said they would invest between $1 million and $10 million. Another 9% expected to spend over $10 million to address GDPR.

But, there is an even larger cost to non-compliance, with penalties of up to €20 million or 4 per cent of global annual revenue, whichever is higher, for non-compliance. Management consulting firm Oliver Wyman predicts that the EU could collect as much as  €5 billion in fines and penalties in the first year from FTSE100 issuers alone. (Until Brexit is formalized, all British companies are subject to GDPR.)

Large multinationals can eat the cost of terrifyingly high compliance, but most businesses lack the resources, motivation or knowledge to get into GDPR compliance. The best advice I can give is for you to find a third-party service provider who has a tech toolbox that provides that compliance. The outsourcing of key technology functions is common place; the more businesses that outsource GDPR compliance, the more it fits within the definition of ‘reasonable’ and provides a due diligence defence.

(Thanks to Neil Beaton of CAPS Group for his thoughts on the technical challenges of GDPR compliance, and thanks to Derek Lackey for his excellent presentation. You can contact Neil at nbeaton@otcgc.com, and Derek at dlackey@newportthomson.com. Any errors or mis-statements are mine.)