Yahoo facing backlash for data hack and email snooping
Yahoo has had better months. Not only was the company forced to announce it had suffered the biggest known data breach in history, but it also had to come clean about its part in a covert email monitoring activity on behalf of the US government. The upshot of which is that Yahoo can expect to receive ‘special attention’ from EU data authorities and a possibly hefty dent in its estimated $4.8 billion sale price from Verizon.
Cybersecurity firm InfoArmor posted an analysis to its website intimating that the breach of security of circa 500 million email accounts was executed by ‘professional blackhats’ who were hired to compromise a number of organisations, including Yahoo.
In an article for NBC News, InfoArmor Chief Intelligence Officer Andrew Komarov was reported as saying that a ‘state-sponsored actor from Eastern Europe commissioned and later paid the hacker collective $300,000 for the Yahoo data trove.’
However, only a few hours later, the Wall Street Journal ran a story in which Komarov apparently backtracked on his earlier assertion: ‘We don’t see any reason to say that it’s state sponsored. Their clients are state sponsored, but not the actual hackers.’ Say, what?
Not the end of the story
While many would be interested in discovering who was responsible for the attack, the more pertinent point is, perhaps, how soon Yahoo knew about it. The company filed documents with the Securities and Equities Commission (SEC) in September stating that there had been no security breaches that would adversely impact its business.
So, if it transpires that Yahoo knew about the hack before that filing, the company could be accused of a deliberate failure to disclose. Should knowledge of the hack goe back even further — let’s say before Verizon agreed to buy Yahoo — the $4.8 billion deal could hang in the balance.
The hack notwithstanding, Yahoo’s apparent willingness to cooperate with the US government in an extensive email snooping exercise, is set to cause further problems across the pond. EU courts don’t condone mass surveillance by US authorities on European personal data and could potentially block data transfers into the US, damaging Yahoo’s business prospects further.
All things considered, Verizon may feel that a discount off Yahoo’s buy price is due. Analysts are suggesting that $1 billion wouldn’t be unfair, though it is almost a fifth of the deal. Much will depend on how confidently Verizon can negotiate – and how badly Yahoo needs to sell.
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