Japan Firms Start Paying Users After Cyberattacks Hit the Economy
Japanese companies have begun paying customers after a run of cyberattacks disrupted internet services and stirred concern about the wider economy. GMO Internet Group will compensate users who lost money when attackers reached its foreign exchange trading service, and every customer will receive 5,000 yen, about USD 32, as what chief executive Masatoshi Kumagai called an initial gesture of good faith. He announced the payments in a blog post.
Park24, which runs the Times car sharing service, said it would pay 3,000 yen to customers after a personal data breach. The company will also stop keeping images of identity documents once registration checks are complete. It expects an extraordinary loss of 5.5 billion yen from its response to the attack and from the compensation.
But the payments are only the visible part of a larger problem. Japan said it would form a team to simulate cyberattacks with AI and hunt for weak points in technology systems. The move came as organisations tried to contain flaws in the PHP programming language, which underpins much of the web.
Government and company websites in Japan, Europe and elsewhere went offline after the PHP flaws became public and prompted millions of hacking attempts. GMO has asked the Japanese government to apply cyberdefence measures, including steps such as attacking hostile servers to neutralise threats. "Now is the time for the public and private sectors to work together to protect Japan," Kumagai wrote.
GMO said it had received a demand for money from a party believed to be behind the attack, along with a threat to publish company and customer information if it did not pay. The company said it would not comply and would respond alongside police and other authorities. It will give customers a free alternative service for six months, and it cannot yet calculate the effect on earnings.
But investors marked the group down. GMO shares fell nearly 14 per cent to a four month low, against a rise of 0.3 per cent in Tokyo's benchmark index. The group had a market value of USD 2.6 billion at the close before the slide.
Kumagai's business spans internet infrastructure, financial services and cryptocurrency trading, which puts several kinds of customer data inside one group. The compensation covers losses that stem from unauthorised access, not the breach alone. No total for those losses has been given.
So the pressure is spreading well beyond two consumer refunds. There were 723 cybersecurity incidents in the year to date, according to data from TrendAI, already more than the annual totals of the two previous years. "Reports may reflect both the threats organizations face and greater visibility into incidents that would previously have gone undetected, been underinvestigated, or remained undisclosed," said Satoshi Nagano, president of ESET Japan.
And experts say AI is helping attackers automate work that once needed people, from scanning for software vulnerabilities to writing phishing campaigns. That makes cybercrime faster and cheaper and harder to detect. The defenders are working from behind.
And the gap is likely to widen. Companies with strong balance sheets can spend their way out of rising risk, according to a report from Moody's Ratings. "Those with weak patching practices are likely to fall further behind, especially if they have large digital networks that greatly broaden their attack surface," the report said.
GMO Internet will pay every customer 5,000 yen and cover losses from the attack on its trading service
Park24 will pay customers 3,000 yen after a data breach and expects a 5.5 billion yen loss
Japan will use AI to simulate attacks, and GMO wants state cyberdefence help
TrendAI counted 723 incidents this year, more than in either of the two previous years
GMO shares fell nearly 14 per cent to a four month low
Source: Reuters
