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Last Friday’s attack was apparently caused by the Mirai botnet, which targeted unprotected IoT devices, including Internet-ready cameras. In its wake, the inevitable has happened. There have been calls for more government regulation:
A U.S. Senator has joined security officials calling for stiffer cybersecurity for Internet of Things (IoT) devices following a major attack last Friday.
In a letter to three federal agencies, Sen. Mark Warner (D-Va.) on Tuesday called for “improved tools to better protect American consumers, manufacturers, retailers, internet sites and service providers.”
People (including Ricochet members) have been warning about the risks of the IoT for ages, but this hasn’t stopped manufacturers from flooding the market with cheap, unsecured devices — nor has it stopped consumers from purchasing them. The consensus of most of the experts I’ve read is that this is indeed a classic tragedy of the commons problem, as Senator Warner suggests, and that the only solution is for the government to step in to solve the problem.
It’s certainly true that no industry could have been warned more often that it had a problem. I read the warnings, and I sure wasn’t keen to buy any of those devices. Frankly, everything I read about the IoT creeps me out and reminds me of this:
But I seem to be an outlier in my instinctive aversion. And it seems to be true that neither manufacturers nor consumers paid those warnings much mind, either out of greed, laziness, or incomprehension. It’s also true that the cost of their error was borne by everyone, not just the specific manufacturers and consumers.
Bruce Schneier, who’s always interesting to read, thinks there’s no conceivable market solution to the problem:
The market can’t fix this because neither the buyer nor the seller cares. Think of all the CCTV cameras and DVRs used in the attack against Brian Krebs. The owners of those devices don’t care. Their devices were cheap to buy, they still work, and they don’t even know Brian. The sellers of those devices don’t care: they’re now selling newer and better models, and the original buyers only cared about price and features. There is no market solution because the insecurity is what economists call an externality: it’s an effect of the purchasing decision that affects other people. Think of it kind of like invisible pollution.
What this all means is that the IoT will remain insecure unless government steps in and fixes the problem. When we have market failures, government is the only solution. The government could impose security regulations on IoT manufacturers, forcing them to make their devices secure even though their customers don’t care. They could impose liabilities on manufacturers, allowing people like Brian Krebs to sue them. Any of these would raise the cost of insecurity and give companies incentives to spend money making their devices secure.
So is this genuinely a situation where government must step in? And if so, is it reasonable to expect the government to be any good at regulating this industry?
Also, a question for the lawyers: Why do we need the government to “impose liabilities” on the manufacturers? That’s to say, what’s preventing Brian Krebs from suing them right now? What prevents the people who were inconvenienced by last Friday’s attack from joining a class action suit against the companies in question?Published in