U.S. Promises Not to Sue Companies for Discussing Hacks

Federal agencies are encouraging businesses to work together to thwart hackers.

A person claiming to speak for activist hacker group Anonymous is seen issuing a warning throught a video circulated online to 'go to war' with the Singapore government over recent Internet licensing rules on November 1, 2013.
National Journal
Brendan Sasso
April 10, 2014, 11:18 a.m.

The Obama ad­min­is­tra­tion wants com­pan­ies to work to­geth­er to battle hack­ers.

The Justice De­part­ment and the Fed­er­al Trade Com­mis­sion is­sued a form­al policy state­ment Thursday, as­sur­ing busi­nesses that they will not face fed­er­al law­suits for shar­ing in­form­a­tion with each oth­er about at­tacks on their com­puter sys­tems.

Com­pan­ies have been nervous that dis­cuss­ing in­form­a­tion about hack­ers could run afoul of an­ti­trust laws, which re­strict the abil­ity of busi­nesses to co­ordin­ate with each oth­er. The laws are in­ten­ded to pre­vent com­pan­ies from stifling com­pet­i­tion and in­flat­ing prices.

But the policy doc­u­ment is­sued Thursday states that shar­ing cy­ber­se­cur­ity in­form­a­tion such as in­cid­ent re­ports, ma­li­cious code, or alerts is “highly un­likely” to vi­ol­ate the an­ti­trust laws. Of­fi­cials said that com­pan­ies with ques­tions about any par­tic­u­lar busi­ness prac­tice can con­tact the fed­er­al agen­cies for guid­ance.

Speak­ing at a press con­fer­ence, Deputy At­tor­ney Gen­er­al James Cole said the massive data breach at Tar­get is “just an­oth­er re­mind­er of how far-reach­ing the cy­ber­threat has be­come.” He said the ad­min­is­tra­tion’s guid­ance “lets every­one know that an­ti­trust con­cerns should not get in the way of shar­ing cy­ber­se­cur­ity in­form­a­tion.”

Bill Baer, the head of the Justice De­part­ment’s An­ti­trust Di­vi­sion, said the policy state­ment is an “an­ti­trust no-brain­er,” and he ex­plained that “as long as com­pan­ies don’t dis­cuss com­pet­it­ive in­form­a­tion like pri­cing and out­put when shar­ing cy­ber­se­cur­ity in­form­a­tion, they’re OK.”

He ac­know­ledged that the state­ment won’t af­fect private an­ti­trust law­suits, but he noted that the courts of­ten de­fer to the leg­al in­ter­pret­a­tions of the an­ti­trust agen­cies.

Rand Beers, a White House ad­viser, ar­gued that it is crit­ic­al that com­pan­ies con­tinu­ally as­sess their net­works and share in­form­a­tion about the latest at­tacks. Oth­er­wise, a single vir­us can quickly spread through en­tire in­dus­tries, he warned.

The of­fi­cials said the guid­ance will help com­pan­ies re­spond to vul­ner­ab­il­it­ies, such as the re­cently dis­covered “Heart­bleed” bug, which has un­der­mined se­cur­ity on much of the Web.

The policy state­ment is the Obama ad­min­is­tra­tion’s latest ef­fort to bol­ster cy­ber­se­cur­ity, which of­fi­cials say is one of the most ser­i­ous na­tion­al se­cur­ity is­sues.

Pres­id­ent Obama urged Con­gress to pass com­pre­hens­ive cy­ber­se­cur­ity le­gis­la­tion in 2012 that would have set se­cur­ity stand­ards for crit­ic­al in­fra­struc­ture (such as banks and power com­pan­ies) and en­cour­aged cy­ber­se­cur­ity in­form­a­tion shar­ing. Re­pub­lic­ans blocked the bill, warn­ing it would im­pose un­ne­ces­sary reg­u­la­tions on busi­nesses.

Obama is­sued an ex­ec­ut­ive or­der in early 2013 that cre­ated vol­un­tary guidelines to help crit­ic­al in­fra­struc­ture op­er­at­ors pro­tect their sys­tems. But the in­form­a­tion-shar­ing por­tion of the le­gis­la­tion had re­mained largely un­ad­dressed.

Obama ad­min­is­tra­tion of­fi­cials in­sisted Thursday that Con­gress must still pass cy­ber­se­cur­ity le­gis­la­tion. FTC Chair­wo­man Edith Ramirez urged law­makers to em­power her agency to fine com­pan­ies for in­ad­equate data se­cur­ity, and to set a na­tion­al stand­ard re­quir­ing com­pan­ies to no­ti­fy con­sumers in the event of a data breach.

Cole said le­gis­la­tion is still needed to al­low the gov­ern­ment and private sec­tor to share in­form­a­tion with each oth­er. He also pushed for tough­er pen­al­ties for hack­ers and ex­pan­ded au­thor­ity to seize serv­ers and In­ter­net do­mains.

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