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Does U.S. business stand a chance of keeping Chinese cyber-spies out of its data?

Ellen Messmer | May 23, 2014
The U.S. Department of Justice, working with the FBI, this week took the unprecedented step of indicting five Chinese army officers for allegedly breaking into the networks of American companies and a labor union to steal trade secrets of use to Chinese businesses.

The U.S. Department of Justice, working with the FBI, this week took the unprecedented step of indicting five Chinese army officers for allegedly breaking into the networks of American companies and a labor union to steal trade secrets of use to Chinese businesses.

China, upset that the DoJ wants these alleged hackers extradited to the U.S. to stand trial, has threatened retaliation in what's become the most serious cyber-spying confrontation yet, with business caught in the middle.

But is it realistic to expect a nation's spy agencies to adhere to rules that would make it off limits to swipe informaton from companies in other countries and share it with businesses in their own backyard? The American Chamber of Commerce in Beijing, which represents about 1,000 American firms with presence in China, Tuesday expressed hope that there might be just such cyber-spying rules of the road.

"While we cannot comment on the specifics of any particular case, AMCham China believes there is a fundamental difference between intelligence gathering for legitimate national security purposes and intelligence gathering for stealing trade secrets, and that the definition of national security ought not include economic interests," Chairman Gregory Gilligan stated. "We urge both governments to reach agreement on the rules of the road regarding cyber security incorporating this distinction."

The National Security Agency, the spy agency vacuuming up massive amounts of data outside the U.S., claims it doesn't share information with U.S. companies for their competitive advantage, but only with government officials for national-security purposes. That restriction is established under law, points out Tim Ryan, managing director at Kroll who joined the security firm two years ago after a career at the FBI leading a cyber-division.

How far that cyber-spying restriction extends is hard to really know. But even Edward Snowden, the former NSA contractor who has leaked volumes of information about how the NSA collects data, hasn't accused the agency of sharing intelligence with American companies the way China's state-sponsored cyber-espionage operations now stand accused of doing with Chinese firms, many of which involve government management anyway.  

The problem for the U.S. today, says Ryan, is that the Chinese government's-sponsored cyber-attacks against U.S. businesses are "just so non-stop" that "it's a machine over there."

Many agree. Chinese cyber-attacks against U.S. companies are an unremitting wave that only slows down during Chinese New Year, says Stuart McClure, CEO of security vendor Cylance. "Once it's over, the activity comes flooding back in."

Chinese facing charges

Indeed, the DoJ this week presented a laundry list of computer-crime charges related to four years of hacking into American corporate networks.

According to the 56-page indictment, the victimized companies were Westinghouse Electric, U.S. Steel, Allegheny Technologies, labor union USW, Alcoa, and the U.S. subsidiaries of Germany-based SolarWorld AG.

 

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