UK: Radar - December 2016: Cybersecurity

Last Updated: 22 December 2016
Article by Taylor Wessing

CYBERSECURITY

NISD (Cybersecurity Directive)

NISD (Network Information Security or Cybersecurity Directive) was published in the Official Journal in July 2016. Member States now have around sixteen months to put implementing legislation in place but transitional provisions will start to apply from February 2017 in terms of actions required by Member States to set up the necessary structures.

The Cybersecurity Directive is relevant to you if you are an Essential Service provider or if you are a Digital Service Provider i.e. an online marketplace, an online search engine or a cloud services provider. This is a minimum harmonisation Directive. That means, not only that Member States have to produce implementing legislation, but also that they have discretion to go above and beyond what the Directive says. We are, therefore, looking (to a certain extent) at fragmented implementation across the EU although multi-jurisdictional companies can take comfort from the fact that they will be regulated in the place of their "main establishment". Read more about the Directive.

Data breaches

2016 has seen a number of significant data breaches and, curiously, a number of breaches which took place several years ago (re-)enter the public domain, presumably as criminals have sought to maximise revenue by putting data they have been exploiting within a closed group on the wider market. Nation state actors, or those allegedly linked to nation states, have also been in the public domain in a more significant way than in recent years, although this is, in reality, a matter of what has been made public rather than an increase in such activity. We have seen the hacking of WADA and the DNC and the leak of information and emails obtained from each, allegations of attacks on electronic voting terminals in the US and further breaches of data relating to military personnel.

On the commercial side, the Yahoo breach of around 500,000,000 records is now top of the list of the biggest breaches in the public domain, and raises interesting questions as to who knew what, and when, in relation to its acquisition by Verizon. In the UK, TalkTalk was the subject of the largest fine handed down by the Information Commissioner's Office to date, with the monetary penalty notice detailing its significant failings. It has since estimated the total cost of the breach to be around £60,000,000, and has lost a significant number of customers as a result.

Warnings made by regulators in September about the risk posed by the Internet of Things, were vindicated in October, after a number of major websites including Twitter, eBay, Paypal, Spotify and the Telegraph, went down following an attack on a domain name server based in New Hampshire. The attack was a distributed denial of service attack whereby malware was used to take control of numerous unsecured internet devices in order to flood the target with traffic, making it impossible for the server to respond to normal queries and direct browsers to the right website. This type of attack is relatively easy to carry out and hard to defend against. It is thought that the attack made use of connected devices which have easily breakable factory-installed default usernames and passwords and insufficient memory for firewalls.

GCHQ is reportedly intending to work with network providers to revise internet protocols in order to make them more resilient to DDoS attacks. It believes that changes can be made to the Border Gateway Protocol (BGP) and Signalling System 7 (SS7) standards which would help prevent trivial re-routing of UK traffic and text scams. ISPs have indicated that this is a potentially simplistic approach to a complex problem as well as a costly one and may do nothing more than move DDoS attacks to other countries.

UK government initiatives

The government published its annual report on the UK's cybersecurity strategy in April. The report claimed significant progress had been made both in terms of the UK's ability to protect itself at national and individual business level, and in terms of tackling cybercrime and developing the cybersecurity market. In November, the government has announced £1.9bn of funding to help put its updated National Cyber Security Strategy in place. The funding will be used to help develop automated defences to cyber attacks, make IoT devices less vulnerable and develop a skilled cyber defence workforce. A new cyber-innovation centre is also being set up in Cheltenham and GCHQ is reportedly working on a national firewall to help block malicious websites and emails.

EU initiatives

The European Network and Information Security Agency (ENISA) published a report in February, outlining the risks posed to cybersecurity by Big Data. The level of replication in Big Data storage and the tendency to outsource its storage as well as the repeated linking of different data sets, all create vulnerabilities and privacy impacts. ENISA urges a 'security by default' approach and sets out good practice suggestions including the use of cryptography, pseudonymisation and access controls.

In July, The EC published a Communication on cybersecurity which sets out measures to improve Europe's cyber resilience and help foster a competitive and innovative cybersecurity industry in Europe. The Communication proposes the creation of an information hub to pool expertise and a cybersecurity training platform. The Communication also promotes a single market in cybersecurity products and solutions.

The Commission also announced a Euro450m investment in a public-private partnership on cybersecurity.

Guidance

  • ICO guidance for small businesses on IT security – the ICO published an updated guide for small businesses on IT security. It contains a step-by-step process to help companies assess threats, update their technology and come into line with the government's Cyber Essentials scheme.
  • G7 principles for the financial sector – the G7 Cyber Expert Group issued non-binding principles for the financial sector (private and public) to promote consistency of approach to cyber threats.

Read our predictions for cybersecurity in 2017.

Read more on Radar

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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