The FTC jumps into Log4j cleanup with one foot

Episode 389 of the Cyberlaw Podcast

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When it comes to spurring remediation of the log4j bug, the FTC's other foot, I argue, is lodged firmly in its mouth.  It has published what can only be described as a regulatory blog post, reminding everyone of the $700 million in fines imposed on Equifax and threatening "to use its full legal authority to pursue companies that fail to take reasonable steps to protect consumer data from exposure as a result of Log4j." Tatyana Bolton defends the agency from a charge of heavy-handedness, arguing that this is the best way to get companies to patch quickly and that only "reasonable steps" are required. I think we'll hear "we only asked for reasonable steps" a lot from the FTC, now that it turns out that fixing the Log4j mess is going to require a lot more than regulatory muscle flexing. I also argue that the FTC's tough-guy pose is just that; when talking about the open source maintainers who actually have to generate many of the patches, the FTC doesn't threaten them with its "full legal authority." Instead, it acknowledges that open source coders "don't always have adequate resources and personnel," something the FTC "will consider as we work to address the root issues that endanger user security." Hmm, maybe Equifax should have pleaded inadequate resources and saved itself $700 million.

Speaking of fallible regulators, Glenn Gerstell gives us a tour of China's tech regulatory landscape, and the remarkable decline it has caused in the fortunes of consumer tech firms there, something the NYT covered in detail last week. Is that good news for Silicon Valley or for US competitiveness? Sadly, probably not, I conclude.

Mark MacCarthy explains why a proposal to combine cryptocurrency with Signal is causing angst among Signal's supporters, who fear an expansion of the end-to-end encrypted service's "regulatory attack surface."

Glenn covers the latest story about security risks and telecom gear from China.

Mark and I dig into the growing enthusiasm for regulating big Silicon Valley companies as gatekeepers.  The Germans are about to apply that approach to Google. And the South Koreans are doing the same to Apple and its app store payment policies.

Tatyana notes the press coverage about possible tensions between two talented and strong cybersecurity officials in the White House: Anne Neuberger and Chris Inglis. I put Glenn on the spot about claims that Anne has "a particular tendency to clash with lawyers." That would only make me love her more, but to my regret, Glenn (who, as NSA's top lawyer, worked with her for years) absolves her of the charge.

Mark and I handicap the probability that the plaintiff will succeed in a highly charged lawsuit against Facebook/Meta for bringing together the boogaloo conspirators who killed a federal protective officer. It's a long shot, but if "negligent design" turns out to create liability for software and algorithms, Signal will have an even greater attack surface than its fans are now worried about.

Glenn explains the charges brought in China against Walmart for breaches of cybersecurity laws (hint: it's mostly not breaches of cybersecurity laws). Speaking of surprises that aren't surprises, Glenn also covers the announcement by Lloyd's of London that cyber insurance won't cover cyber-attacks attributable to nation-states. 

Finally, I devote a few minutes to a rant about the Justice Department's decision to expand charges against Joe Sullivan, Uber's former CISO, for his role in paying "bug bounties" to hackers who looked more like crooks than bounty hunters when they compromised a bunch of Uber records. More than a year after charging Sullivan with obstruction of justice for using the "bug bounty" justification to keep the whole thing quiet, Justice piled on new charges of wire fraud for more or less the same thing. Glenn and I both question the decision to do this without any new facts to base the new charges on. And I point out the logical consequence of telling breach responders that they could face wire fraud charges if they decide not to disclose the breach (or maybe delay notice too long). The new Justice tack will (or should be) fatal to the FBI's desire to be called in to assist and observe while companies are dealing with breaches.  If  there's even a small risk that a decision to delay or withhold notice could lead to a criminal investigation, why would any GC want to have an FBI agent sitting in the room while the decision is being made?

Download the 389th Episode (mp3)

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