EU Businesses Risk Fines For Not Complying With IoT Security Rules
Companies could be fines of €15 million or 2.5% of turnover if they don’t comply with draft EU legislation addressing the Internet of Things (IoT). Makers of IoT devices - ranging from iPhones and fridges to baby monitors and TVs, and IT software developers - will face heavy fines if they do not apply rules aimed at averting cyber attacks.
These devices can have a poor degree of cyber security, as made evident by numerous vulnerabilities and the lack of security updates.
IoT technology is propelled us into the Fourth Industrial age and are immensely valuable. But as the EU has noticed, there are inherent security risks; a breach in one tiny part of a system can compromise the whole unit. According to the draft, some vendors present customers with “insufficient” information about their level of protection. Companies will have to get certificates showing they’re meeting the basic requirements to minimise the risk of cyber attacks and hacking attacks. A study by EU regulators suggests that only 50% of relevant companies have proper security against cyber attacks.
The size of the market for hardware makers is roughly 23,000 companies with a combined annual turnover of €285bn and around 370,000 software makers with a total yearly turnover of €265bn.
Digital identity expert David Mahdi, CISO Advisor at cyber security firm Sectigo says “The challenge that IoT security presents is the sheer multitude and diversity of devices, networks and protocols that, left unchecked, could pose severe threats to companies and people."
"Cutting-edge security technology is needed in order to ensure the information remains under control, and the use of machine intelligence is expected to provide a great advantage in monitoring operational security in the context of IoT. The attack vectors and threat actors to the IoT are constantly evolving, warranting best-practice device provisioning and the ability to quickly and proactively manage current cryptographic algorithms with those that will supersede them in the future. This will be vital within the lifespan of the devices being deployed to customers.” Mahdi said.
Fines for breaking a key component of the proposed legislation could exceed €15 million, or 2.5 percent of a company’s global annual revenue, whichever is greater. Less serious infractions may result in fines of up to €10 million, or 2% of worldwide annual sales. Organisations that give “incorrect, incomplete, or misleading” information could face fines of up to €5 million, or 1 percent of annual sales.
The European Parliament, the Council of the European Union and the European member states have already voted to pass two important pieces of legislation that will tighten cybersecurity requirements for firms to reduce the risks of cyber attacks.
In May, the EU Parliament and the Council reached a provisional agreement on the Digital Operational Resilience Act (DORA), and even though the deal still needs to be approved in plenary session; this is normally seen as a formality once there is political consensus.
Pymnts: Pymnts: FT: Bloomberg: Techzine IT News:
You Might Also Read:
Securing Smart Devices:
