A classic example of a misleading news story
The problem with the news is that it is usually generated by parties with a vested interest. When the news comes from government, it is because government has an axe to grind. When the news comes from a security firm, it is because that firm has a product or service to sell.
Usually this vested interest is well disguised and hidden behind actual facts. Sometimes, however, the truth is so far distorted that you simply have to comment. And here’s an example: a missive from a PR company that states, verbatim:
EU Cyber Security Directive Could Cost Organisations Billions
The new EU Directive on Cyber Security is going to have a huge impact on all organisations that trade in the EU. The Directive states that any organisation that does not have their cyber security in order and suffers a security breach will face extremely heavy fines of up to 2% of their annual global turnover. This means for large enterprises or banks, fines could run into millions or billions of pounds…
…recent research… has revealed that many industries are seriously behind in terms of IT security and risk facing extremely heavy fines when the Directive comes into action.
This is simply wrong. It demonstrates either an abject failing to understand EU processes, or a conscious attempt to mislead.
The European Commission proposes the laws that the European Parliament votes to accept or reject. It has two vehicles: a Directive and a Regulation. Regulations are European laws that become national laws verbatim. Directives are more like a statement of intent — individual nations are able to transpose Directives into national law in accordance with local practice and requirements.
There are two relevant EC proposals right now: a cyber security directive, and the general data protection regulation. Time and again security firms get these separate issues muddled in a manner that is either ignorance of European processes, or an intentional attempt to mislead.
The cyber security directive lays down no specific sanctions — these are left for the individual nation states to specify themselves.
Member States shall lay down rules on sanctions applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that they are implemented. The sanctions provided for must be effective, proportionate and dissuasive.
EU cyber security directive
It is the regulation that imposes the 2% maximum sanction — under specific personal data loss conditions (and for smaller companies, that may well turn out to be less than the current maximum fine that can be levied by the UK’s Information Commissioner).
The amount of the administrative fine shall be fixed with due regard to the nature, gravity and duration of the breach, the intentional or negligent character of the infringement, the degree of responsibility of the natural or legal person and of previous breaches by this person, the technical and organisational measures and procedures implemented pursuant to Article 23 and the degree of cooperation with the supervisory authority in order to remedy the breach…
…The supervisory authority shall impose a fine up to 1 000 000 EUR or, in case of an enterprise up to 2 % of its annual worldwide turnover, to anyone who, intentionally or negligently etcetera, etcetera
EU proposal for a general data protection regulation
And remember that passage of the GDPR into law is still far from certain. However, by conflating these two separate proposals:
- government is able to suggest that the EU proposals will place an unacceptable burden on national business (in reality, it is almost entirely the UK that takes this approach, largely because the Data Protection Regulation will impose unacceptable burdens on GCHQ’s current free rein in electronic surveillance)
- security firms are able to frighten industry into spending ever more money on ever more weird and wonderful security products. A risk based approach to security will probably show that the actual risk is far, far less than the warnings from the security industry.
The tragedy in this particular instance is that two good names are dragged into the mire: Tripwire and Ponemon. I would suggest that if you see news articles over the next couple of days saying that industry is being faced with massive fines for not having adequate security, you take a step back and consider the actual EU proposals before rushing out to spend 2% of your annual income on security products.
This example does the security industry no favours whatsoever.