Cyber-Spying Erodes Trust in Internet as Economic Engine: Report

The interaction between the U.S. and China and the recent criminal charges filed against five Chinese nationals demonstrate the costs to the global economy, argues one think tank.

Countries that seek to improve their economy through cyber-espionage undermine the trust in the Internet and could harm the future of the global economy, the Center for International Governance Innovation (CIGI) argued in a policy paper published on June 20.

While a number of countries, such as China, are exploiting uncertainty in international policy and law to invest in massive cyber-espionage operations, the distrust caused by their actions will have a significant impact on the future of the Internet economy, according to the report, titled "Global Cybercrime: The Interplay of Politics and Law."

While actions, such as the United States' indictment of five Chinese nationals for cyber-espionage will call attention to the problem, very few disincentives exist to dissuade nations from following their short-term interests, Aaron Shull, a research fellow and counsel at CIGI and the author of the paper, told eWEEK.

"We need to raise the costs of engaging in this behavior, and there are a number of policy mechanisms that you can try to accomplish that," he said. "But more importantly, I think we need to evolve the discourse away from narrow state-to-state interest, and treat it as a broader global problem where we could potentially undermine the biggest driver of economic growth and innovation the world has ever known—a secure, scalable and responsibly governed Internet."

In May, the U.S. Department of Justice indicted five members of the People's Liberation Army—China's military—for hacking into six U.S. companies and industry groups and stealing information. The victims include Alcoa, Westinghouse Electric, the U.S. subsidiary of SolarWorld AG, U.S. Steel, Allegheny Technologies and an industrial workers union. The action is the most significant political response to date by the United States against cyber-spying.

"This is a case alleging economic espionage by members of the Chinese military and represents the first-ever charges against a state actor for this type of hacking," U.S. Attorney General Eric Holder said in a statement at the time. "The range of trade secrets and other sensitive business information stolen in this case is significant and demands an aggressive response."

Such action, and future political fallout from economic espionage, could lead to a less open global marketplace, making it harder for other industries to benefit from the promise of the Internet, CIGI's Shull said. While many countries look at the first two decades of the 21st century as a disruptive period during which they can use the Internet to get ahead, the long-term impact will be negative, he said.

"Employing a policy of economic cyber-espionage and cyber-crime as a mechanism for advancing narrow national economic interests holds the potential to undermine trust in the system," the report states. "This is a major problem because the Internet has been such a force for economic growth precisely because everyone from individuals to enterprises trusts the security of online transactions."

While revelations regarding the United States' National Security Agency and its widespread spying on other countries have weakened the country's efforts to head off economic espionage, Shull stressed that spying for the benefit of a country's security is different from helping domestic industries in the global marketplace.

"Countries engage in espionage all the time, but there is a difference between security-oriented espionage and economic espionage or commercial espionage, or—let's call it what it is—which is crime," he said. "They are not the same thing."

Robert Lemos

Robert Lemos

Robert Lemos is an award-winning freelance journalist who has covered information security, cybercrime and technology's impact on society for almost two decades. A former research engineer, he's...