Cybercrime is Growth Industry Estimated to be as Much as $575 Billion

29 July 2014 Internet, IT & e-Discovery Blog Blog
Authors: Peter Vogel

A recent report estimates that the ”cost of cybercrime includes the effect of hundreds of millions of people having their personal information stolen—incidents in the last year include more than 40 million people in the US, 54 million in Turkey, 20 million in Korea, 16 million in Germany, and more than 20 million in China.” The Center for Strategic and International Studies and McAfee issued their June 2014 report entitled “Net Losses: Estimating the Global Cost of Cybercrime” with these comments about the impact on the world:

  • The cost of cybercrime will continue to increase as more business functions move online and as more companies and consumers around the world connect to the Internet.
  • Losses from the theft of intellectual property will also increase as acquiring countries improve their ability to make use of it to manufacture competing goods.
  • Cybercrime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors.
  • Governments need to begin serious, systematic effort to collect and publish data on cybercrime to help countries and companies make better choices about risk and policy.

The report also has a chapter on acceptable losses which may come as a shock to many, but should not given these observations:

One way to think about the costs of cybercrime is that societies bear the cost of crime and loss as part of doing business and a tradeoff for convenience and efficiency. Companies and individuals have decided that the net gain of using automobiles and giant merchant ships outweigh the potential cost. The problem with these analogies is that many companies do not know the extent of their losses from cybercrime, leading them to make the wrong decisions about what is an acceptable loss.  

Here is a list of the chapters in the report:

Estimating global loss from incomplete data

Regional variations

Incentives explain cybercrime’s growth

Acceptable loss from cybercrime

IP theft and innovation cannibalism

Penalty-free financial crime

Confidential business information and market manipulation

Opportunity cost and cybercrime

Recovery costs

Obviously cybercrime is huge, will never get smaller, and no one is immune

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Authors

Related Services

Insights