Details of 50 million accounts have been lost to unknown nefarious individuals, but Facebook might get away with just a heavy hand-slapping from European watchdogs until the full consequences have been identified.
Last week, data from 50 million Facebook accounts was lost due to a vulnerability in the ‘View As’ feature, though as the incident was reported in the 72-hour window set forward by the European Commission, the social media giant might avoid serious penalties under GDPR. The maximum fine would be $1.63 billion.
“On the afternoon of Tuesday, September 25, our engineering team discovered a security issue affecting almost 50 million accounts,” said Guy Rosen, VP of Product Management. “We’re taking this incredibly seriously and wanted to let everyone know what’s happened and the immediate action we’ve taken to protect people’s security.”
Attackers exploited a vulnerability in Facebook’s code that impacted ‘View As’, a feature which allows users to view their profile from the perspective of another. This vulnerability allowed the attacker/s to steal ‘Access Tokens’, allowing them to hijack user accounts. Access tokens are the equivalent of digital keys keeping people logged in to Facebook so they don’t need to re-enter their password each time they use the platform.
While this might seem like a significant oversight from the Facebook security, it might just avoid a significant fine. The incident was reported to the relevant authorities after two-days, well within the required window, while the consequence of this incident is also unknown for the moment. As part of GDPR, those companies who report an incident within the required window and who are deemed to be compliant with investigators, will not receive the heaviest fines. The objective here is to remove the stigma of self-reporting, essentially rewarded those who come clean and do not try to hide the incident.
The consequence of the breach is also an important factor. Until misuse of the data can be identified, political persuasion for example, watchdogs are unlikely to be heavy handed. Using both the consequence and compliance with investigators as reasons to reduce the fine are important factors in ensuring the industry works with regulators. The less time these watchdogs spend policing the industry and searching for potential incidents means more time can be spent proactively making security features and processes more resilient. If watchdogs appear rational in their approach to punishments, industry will be much more of an ally.
“The time between detection and public notification on this one may be one for the record books, likely driven as much by risk to reputation and a wary eye on some of the large fines levied lately, as much as by GDPR and other compliance requirements,” said Dan Pitman, Principal Security Architect at Alert Logic. “New features increase the risk that vulnerabilities like this can become part of the live application, and Facebook is known to implement new features at a high rate, having been acknowledged as the leader in agile web development practices in the past.
“This ‘continuous delivery’ of new features, combined with the modular nature of that delivery, increases risk that vulnerabilities like this can become part of the live application. Testing all of the myriad combinations of the sometimes hundreds of components, or modules, that can interact is the challenge.”
The very path to ensuring a more engaging platform might well be what is causing Facebook problems, but in the pursuit of relevance, the Facebook business model might be undermined. Just as with the Cambridge Analytica scandal, users might be discouraged from putting additional information onto the platform, or even encouraged to remove some. At first, this will not have a significant impact on Facebook, but straws piling up on the camel’s back will eventually cause some damage.
While exiting users might be incrementally impacting the Facebook business, the advertisers might start looking at the platform as well. This is not to say people will stop advertising on Facebook, but the more incidents impacting the brand and the more stories of people becoming disengaged might have an influence. Facebook might have led the way when it comes to hyper-targeted advertising but others are catching up. Google is arguably the only platform which can compete toe-to-toe with Facebook, but it doesn’t have the suspect clouds lurking overhead. Twitter has upped its game, Microsoft’s Xbox platform is one worth keeping an eye on, as is AT&T’s advertising business Xandr. Even when you look at companies like Sky, the AdSmart platform offers an incredibly targeted offering. These security breaches might start to weigh heavy considering there are other options out there.
Another very important factor to consider with this incident is GDPR. Since being passed in May, this is the first major incident to test the resiliency and credibility of the rules. How European investigators, currently being led by the Irish data protection watchdog, react will set precedent and also impact the way which other companies view the rules. The next few weeks are very important for Europe in terms of validation.
The issues which the regulators are facing at the moment are consequence and bad guys. To make an appropriate ruling, demonstrate the importance of security and dish out the appropriate fine, there needs to be someone or something to point the naughty finger at.
“Based on information available, a video uploading feature implemented in July of last year exposed this feature to a flaw that allowed attackers to impersonate other user accounts and effectively obtain full access to their Facebook profiles,” said Greg Foss, Senior Manager of Threat Research at LogRhythm. “It appears that attackers are able to access the accounts of ‘friends’ or those already connected to the compromised account.
“If that’s true, it may be possible to trace the attacks back to a single point of origin, given the nature of how the attack spreads to other accounts. That said, the origin account will most likely not be that of a real Facebook user, so determining an individual or group behind this will take some digging.”
When a bad guy has been found, the threat becomes real and there are tangible consequences. This is when the appropriate punishment can be justifiably dished out, while also maintaining a positive relationship with industry, and the dangers of the digital economy can be effectively communicated to the general public. This will scare Facebook more than anything else.
Fines are okay, they are a one off hit, but negative PR and public outcry will mean less people engage with the Facebook community. This will have an impact on the bottom line. Managing this negative impact will be significantly more important than any fine dished out by the European Commission.