Via Chris Soghoian, we learn that a Saudi Arabian telecom company (one of just two) contacted well-known pro-privacy researcher Moxie Marlinspike recently to see if he might help them intercept communications from a variety of popular communications apps, including Twitter, Viber, Line and WhatsApp. Curious about what they wanted, Marlinspike emailed with them a bit, and then published what he was told -- including the fact that they later told him they very quickly and easily figured out how to intercept WhatsApp communications. Eventually, he told them that he wouldn't work with them, and the guy he was communicating with told him by not helping the Saudi government intercept communications, he was helping the terrorists:

I know that already and I have same thoughts like you freedom and respecting privacy, actually Saudi has a big terrorist problem and they are misusing these services for spreading terrorism and contacting and spreading their cause that’s why I took this and I seek your help. If you are not interested than maybe you are on indirectly helping those who curb the freedom with their brutal activities.

From there, however, Marlinspike goes on into a very interesting discussion, well worth reading, about changes in the hacker/security community lately and the lucrative business of selling 0day exploits (often to governments) rather than publishing them and getting things fixed.

Forgetting the question of legality, I hope that we can collectively look at this changing dynamic and perhaps re-evaluate what we culturally reward. I’d much rather think about the question of exploit sales in terms of who we welcome to our conferences, who we choose to associate with, and who we choose to exclude, than in terms of legal regulations. I think the contextual shift we’ve seen over the past few years requires that we think critically about what’s still cool and what’s not.

Maybe this is an unpopular opinion and the bulk of the community is totally fine with how things have gone (after all, it is profitable). There are even explicitly patriotic hackers who suggest that their exploit sales are necessary for the good of the nation, seeing themselves as protagonists in a global struggle for the defense of freedom, but having nothing to do with these ugly situations in Saudi Arabia. Once exploits are sold to US defense contractors, however, it’s very possible they could end up delivered directly to the Saudis (eg, eg, eg), where it would take some even more substantial handwaving to think that they’ll serve in some liberatory way.

Exploits will be exploited. Helping anyone to make use of them means that eventually they're going to get exploited by others in ways you might not agree with.

For years, we've talked about how casinos were able to get away with not paying people who won jackpots from electronic gambling machines, by claiming that their wins were really because of software glitches. That always seemed like a highly questionable practice, but even more questionable was filing criminal charges against winners who won because of those glitches. We talked about one such case back in 2007, and then another one in early 2011. That 2011 case involved two guys, John Kane and Andre Nestor, who had figured out a bug in some video poker software from International Game Technology, a gaming giant.

The bug was very complex. It involved a series of different steps that had to be taken: play one game on the machine until you have a high payout, then switch to a different game, play until an option popped up to "double up" (basically a double or nothing proposition on a "high card wins" bet), then add more money to the machine, exit the specific game, change the denomination amount to the game maximum, and then switch back to the original game played. At that point the high payout from the initial round shows, allowing that amount to be re-awarded. On top of that, it would recalculate the award by the new denomination level, often increasing the "payout" by 10x.

Apparently Kane discovered this bug by accident from playing a ridiculous amount of video poker. His lawyer claims that Kane was obsessed with video poker and probably played it more than anyone. He also insists that there was no research or effort that went into this. It was just a fluke from playing so often that Kane found the bug -- and then got his buddy Nestor (and a few others) involved in using this bug to win an awful lot of money. When Nestor was arrested, he was reasonably angry about the whole thing:

“I’m being arrested federally for winning on a slot machine,” he said. “It’s just like if someone taught you how to count cards, which we all know is not illegal. You know. Someone told me that there are machines that had programming that gave a player an advantage over the house. And that’s all there is to it.…

“Who would not win as much money as they could on a machine that says, ‘Jackpot’? That’s the whole idea!”

The feds, of course, hit them with CFAA (Computer Fraud and Abuse Act) charges, the same highly questionable hacking law we've been writing so much about lately. The feds argued that Kane and Nestor "exceeded authorized access" -- one of the most troubling parts of the CFAA. The DOJ argued that:

In short, the casinos authorized defendants to play video poker. What the casinos did not do was to authorize defendants ‘to obtain or alter information’ such as previously played hands of cards. To allow customers to access previously played hands of cards, at will, would remove the element of chance and obviate the whole purpose of gambling. It would certainly be contrary to the rules of poker.

However, the court was skeptical of this argument, and after the 9th Circuit's ruling in last year's case against David Nosal, where they said that merely violating an employer's computer use policy did not mean you had exceeded authorized access, the court asked the DOJ to explain how the CFAA still applied in light of the Nosal ruling.

Apparently, the DOJ realized that the CFAA charges no longer made sense and, yesterday afternoon dropped those charges. In a simple filing with no explanation, the DOJ asks the court to dismiss the two CFAA-related charges in the indictment. Kane and Nestor still face a single wire fraud charge, but that's much less of a threat than the CFAA charges. At the very least, it's good to see increasing pushback on the DOJ for its regular abuse of the CFAA to pile on charges.

When we wrote last year about a Dutch idea to give police there the power to break into computers -- even those located abroad -- we and many others pointed out a number of deep flaws with the plan. Undeterred, the Dutch government seems to be going ahead with the scheme, as Bits of Freedom explains:

The police should be allowed to hack into mobile phones and computers, even when these are located abroad. This is proposed by the Dutch government on May 2nd of 2013. While this appears to be a powerful asset for law enforcement, in reality it creates unnecessary vulnerabilities for citizens.

Not content with that really bad idea, there's a couple of others tacked on for good measure, as the BBC reports:

The bill would also make it a crime for a suspect to refuse to decipher encrypted files during a police investigation.

It is expected the draft legislation will be put to parliament by the end of the year.

The bill singles out child pornography and terrorism as two areas of special concern. The publication of stolen data would also become punishable.

It's easy to see how the last of those could be abused to silence inconvenient whistleblowers. Bits of Freedom sums up well the key danger with the bill:

other countries, such as China, will use the powers as a justification for their own activities. They will follow the Dutch example by allowing their police to use the same methods, including hacking abroad, in order to delete controversial data. Civilians will become the victims in an arms race between hacking governments.

Indeed, it's worth considering for a moment what the Chinese response will be when it finds Dutch police, with the full approval of the Dutch government, deleting files or installing spyware on computers on its territory. It won't matter if the latter were involved in breaking into Dutch systems, or controlling a global botnet: national pride will be at stake over what will effectively be an attack on Chinese citizens and property. So as not to lose "face", a robust response is guaranteed. Is the Netherlands (population 6,065,459 16,788,973) really ready to take on China (population 1,353,821,000) over this?

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We've talked plenty about the government abusing the CFAA to pretend that some minor hacks were some giant criminal conspiracy, but now even the mainstream press is starting to recognize that an overactive Justice Department seems so freaked out by computers that it feels the need to use the CFAA over and over again against minor hacks. We've covered the various cases mentioned in the article in the past, but it's good to see a paper such as the Washington Post call the administration out for its silly overreactions. It's as if they see a computer and assume that something bad must be happening. At no point, when it comes to these cases, does the DOJ seem to step back and look at the actual seriousness of any of these cases.

The US government is already fighting wars on several fronts, including the perpetual War on Terror. "War is the health of the state," as Randolph Bourne stated, and the state has never been healthier, using this variety of opponents as excuses to increase surveillance, curtail rights and expand power.

Bruce Schneier highlights a piece written by Molly Sauter for the Atlantic which poses the question, "If hackers didn't exist, would the government have to invent them?" The government certainly seems to need some sort of existential hacker threat in order to justify more broadly/badly written laws (on top of the outdated and overbroad CFAA). But the government's portrayal of hackers as "malicious, adolescent techno-wizards, willing and able to do great harm to innocent civilians and society at large," is largely false. If teen techno-wizards aren't taking down site after site, how is all this personal information ending up in hackers' hands? Plain old human carelessness.

According to the Privacy Rights Clearinghouse, the loss or improper disposal of paper records, portable devices like laptops or memory sticks, and desktop computers have accounted for more than 1,400 data-breach incidents since 2005 -- almost half of all the incidents reported. More than 180,000,000 individual records were compromised in these breaches...

By comparison, only 631 breaches were attributed to actual hacking, or at least hacking as it's portrayed by the government. Private entities aren't very worried about being hacked either, at least not from the outside. Their main concern, according to the Privacy Rights Clearinghouse, is "inside jobs" by disgruntled employees.

Nonetheless, the narrative advanced by the government (and passed along by the largely credulous mainstream media) of unstoppable hackers and their omnipresent threat to major companies, the government itself, average Americans and underlying infrastructure, continues nearly unimpeded. This narrative is essential to those in the government who wish to justify large-scale surveillance of anything and anyone connected to the internet. The scarier the image, the more it can get away with.

It is the hacker -- a sort of modern folk devil who personifies our anxieties about technology -- who gets all the attention. The result is a set of increasingly paranoid and restrictive laws and regulations affecting our abilities to communicate freely and privately online, to use and control our own technology, and which puts users at risk for overzealous prosecutions and invasive electronic search and seizure practices. The Computer Fraud and Abuse Act, the cornerstone of domestic computer-crime legislation, is overly broad and poorly defined. Since its passage in 1986, it has created a pile of confused caselaw and overzealous prosecutions.

We've seen the overzealous prosecution and expressed disbelief and amazement at some of the interpretations of this outdated law. (Amazingly, Sauter's post was written before the most recent cases of overzealous prosecution.) And instead of fixing the CFAA, legislators are actively working to make it worse, even as overly-broad cybersecurity legislation is being negotiated in secret.

The "modern folk devil" image has become part of the mass consciousness. Anonymous and its various offshoots roam the internet, at turns wreaking havoc and helping the oppressed, like an electronic manifestation of Loki, the Distributed. These activities are duly reported by the media in ominous tones, further driving home the image of the hacker at Millennial Public Enemy No. 1. The acts and the perception of the damage caused by this hacking are miles apart, as is perfectly illustrated by xkcd.

Many members of the American public are already convinced something should be done about hackers. Many of our representatives feel the same way. A lack of knowledge of the underlying technology, much less the methods or culture, hasn't deterred legislators from crafting an overbroad response with the CISPA bill. Examining the issues more closely or reconsidering the legislation doesn't seem to be an option. After all, a "cyber Pearl Harbor" is all but inevitable, a conclusion confirmed by shouting "HACKER!" in the halls of Congress and hearing it echoed back by like-minded representatives, sympathetich government agencies, the media and a subset of the American public.

In the effort to protect society and the state from the ravages of this imagined hacker, the US government has adopted overbroad, vaguely worded laws and regulations which severely undermine internet freedom and threaten the Internet's role as a place of political and creative expression.

The endgame is more control, and the "hacker" provides an ominous, omnipresent threat that, because of the hacker's naturally secretive nature, can neither be confirmed or denied with any veracity. Much like the War on Terror, this War on Hacking takes rights from the American public, carves out huge chunks and sends the gutted remains back to citizens in a package marked "Safety."

Another day, another self-inflicted privacy breach. This time it's a UK private parking enforcement contractor that's leaving its supposedly-secret stuff right out in the open.

UK Parking Control (UKPC) is accused of revealing photographs of Brits' cars parked with number plates clearly to be read and in some cases the location revealed. In some images it's alleged that other details such as identification cards, shopping or belongings are clearly visible. Campaigners against private parking firms believe these images - allegedly made easily accessible to anyone on the UKPC website - exposed drivers' personal information.

When UKPC tickets a car, its enforcers take photos of the vehicle (and, apparently, inside the vehicle, among other places), which are uploaded to UKPC's site. The ticket itself has a printed URL pointing to the damning photos of the illegally parked vehicle. It's a slick system, but its "security" is easily thwarted by a process AT&T might find strangely familiar.

[O[ne ticket recipient claimed to have found that by tweaking values in this web address, he could access thousands of other digital photographs of other people's vehicles... Some shots show personal items on view inside the vehicles, such as an ID card placed next to a disabled-driver badge.

As you may recall, tweaking URLs allowed "Weev" to access the email addresses of hundreds of iPad users (and landed him in jail). The same lack of basic security is on display here. Changing a few values in the URL results in access to photos you were never meant to see.

A blog called Nutsville, which has been a longtime critic of the UK's private parking enforcement, posted several photos obtained from UKPC's website. Among the expected photos of vehicles (with visible license plates) are other oddities, including shots of the lower extremities of parking enforcement employees relaxing at home, several photos of vehicle interiors and most disturbingly, crystal clear photos of drivers' identification cards.

After the Register reported this story, the UK Information Commissioner's office pledged to investigate the leak. UKPC hasn't publicly responded to the breach, but it did send its lawyers after Nutsville in the form of a bizarre Letter Before Action that mixes and matches criminal and civil actions and seems unable to decide on when exactly Nutsville should respond/comply. Nutsville's response to the letter is well worth reading, punching holes in its paper-thin claims and generally deriding the ineptitude of the correspondence.

The letter claims Nutsville has breached the Computer Misuse Act, claiming these photos were acquired by "using a password, without authorisation, to access their website." Nutsville points out this is completely false. The only thing accessed were various URLs on UKPC's site by manipulating values in the URL themselves. From that point on, UKPC's legal representative goes completely off the rails, threatening to inform the police (a criminal matter) of Nutsville's actions. Mere sentences later, the lawyer threatens "injunctive High Court proceedings," suddenly making it a civil matter. On top of that, UKPC's rep demands Nutsville take down the blog post by 10 AM on April 2nd, only to wrap up the bungled legalese by requesting a reply by no later than April 8th.

As both deadlines have come and gone with no follow-up post from Nutsville (or response from UKPC), it would appear that the parking enforcement contractor has either given up on pursuing these bogus legal claims or is tied up attempting to clean up its own backyard ahead of the pending investigation.

The most disappointing aspect of this story is UKPC's response. Disappointing, but far from unexpected. For many businesses, the most common reaction to being informed of a data breach is to shoot the messenger. Rather than issue an apology and fix the problem, they tend to fire off legal threats about "unauthorized access" or other vague hacking claims as if the end user making the discovery should be treated as a criminal for their own negligence.

A bunch of internet activists, including Fight for the Future and Demand Progress, among others, have launched a new site: FixTheCFAA.com, asking people to contact their lawmakers and demand that they fix the CFAA law, rather than make it worse.

The Computer Fraud and Abuse Act is the law under which Aaron Swartz and other innovators and activists have been threatened with decades in prison. The CFAA is so broad that law enforcement says it criminalizes all sorts of mundane Internet use: Potentially even breaking a website's fine print terms of service agreement. Don't set up a Myspace page for your cat. Don't fudge your height on a dating site. Don't share your Facebook password with anybody: You could be committing a federal crime. (Read more here.)

It's the vagueness and over breadth of this law that allows prosecutors to go after people like Aaron Swartz, who tragically committed suicide earlier this year. The government threatened to jail him for decades for downloading academic articles from the website JSTOR.

Since Aaron's death, activists have cried out for reform of the CFAA. But members of the House Judiciary Committee are actually floating a proposal to expand and strengthen it -- that could come up for a vote as soon as April 10th! (Read more here.)

Thankfully, we've heard that the public outcry over the bad CFAA reform proposal probably (though not definitely) means that it won't be scheduled for a markup this week (as originally intended). However, that doesn't mean it's not still a major risk. There remains strong support from law enforcement folks and the Justice Department in particular for this kind of CFAA reform (the kind that makes it even broader). And, tragically, many in Congress just don't think that the public cares enough to support a bill in the other direction. Hopefully enough people speak up and let them know that this is unacceptable. A law that criminalizes breaking terms of service is not a law worth having on the books.

We recently wrote about how Aaron Swartz's legal team was arguing with MIT and the DOJ about publicly releasing some of the documents in the case against him. MIT and the DOJ want to keep the names of key people at MIT and JSTOR secret, while Swartz's family says the info should be public. In response, among other things, the US Attorneys' Office has said that, since Swartz's death, they've been bullied and hacked. From the filing:

In my capacity as First Assistant United States Attorney, I have been shown various harassing and potentially threatening email messages directed at United States Attorney Ortiz and the United States Attorney’s Office following Mr. Swartz’s suicide.

Attached at Tab E are copies of the following articles:

a. Swartz case protest at Boston US Attorney’s Home, The Boston Globe, March 12, 2013; and
b. Swartz protesters go to prosecutor’s home, The Boston Globe, March 17, 2013.

In my capacity as First Assistant, I have been shown various harassing and threatening messages directed at AUSA Heymann. One such email I have seen states, among other things:

ROFLMAO just saw you were totally dox’d over the weekend by Anonymous. How does it feel to become an enemy of the state? FYI, you might want to move out of the country and change your name . . .

That same email copies personal information of AUSA Heymann, including his home address and personal telephone number, among other things. AUSA Heymann has also reported to me that his personal information (including his home address, personal telephone number, and the names of family member and friends) were posted online, and that his Facebook page was hacked.

Attached at Tab F is a redacted copy of a postcard that AUSA Heymann has informed me he received at his home.

Attached at Tab G is a copy of a postcard that Professor Philip Heymann has informed me he received.

This is the first postcard they're talking about: The picture in the center is of Philip Heymann, father of Steven Heymann. Steve Heymann led the prosecution of Swartz. His father, Philip is a former deputy attorney general and a professor at Harvard.

Once again, as we've stated numerous times in the past, these kinds of activities, while they may feel like a way to make a statement against those who have done wrong, are incredibly counterproductive and stupid. Rather than making any sort of realistic or helpful point, they just give more ammo to the DOJ to block a full, fair and thorough exploration into what went wrong. Making them into victims is a really pointless move that helps the DOJ continue to cover up the details of what happened by giving them cover.

I recognize that there's tremendous anger towards the US Attorneys' office over this case, and much of that anger is likely justified. But channeling that anger into childish threats doesn't help anyone, least of all Swartz's memory and family. Yes, the prosecution of Swartz was unfair, and I would support a legitimate investigation into what happened and ways to keep the DOJ from such overzealous prosecution in the future (though, I agree with others that this sort of thing is endemic to the DOJ, and wasn't unique to Swartz's situation). But these actions turn the DOJ into victims and give them an excuse to hide behind. These kinds of attacks may make some kids feel better, but they don't help at all.

Last year, Techdirt wrote about an interesting article suggesting that we should welcome "cyberwar" since it would be so much less painful than the ordinary kind. Of course, that begs the question what we actually mean by "cyberwar", since some forms are probably less humane than others. As we have pointed out, the use of the totally embarrassing "cyber" prefix is really just an excuse for more government controls and for security companies to get fat contracts implementing them.

Against that background, the following news from The Verge about an attempt to pin down what exactly "cyberwar" might be, is particularly interesting:

A landmark document created at the request of NATO has proposed a set of rules for how international cyberwarfare should be conducted. Written by 20 experts in conjunction with the International Committee of the Red Cross and the US Cyber Command, the Tallinn Manual on the International Law Applicable to Cyber Warfare analyzes the rules of conventional war and applies them to state-sponsored cyberattacks.

The Tallinn Manual on the International Law Applicable to Cyber Warfare is a fascinating, if rather dry read: it consists of 95 key statements or rules about "cyberwarfare", each followed by pages of academic argument about what that statement means, and why. Mostly, it's about transposing existing law on warfare into the online world, defining things like "sovereignty", "attack", "force", "proportionality" etc. But there's one area where old ideas don't help: that of "hacktivists", defined in the Manual as "A private citizen who on his or her own initiative engages in hacking for, inter alia, ideological, political, religious, or patriotic reasons."

That's because conventional war makes a distinction between combatants -- those fighting in regular armies -- and those who are "unprivileged belligerents". The difference is crucial: the former enjoy important rights, for example to be treated as prisoners of war if captured, whereas "unprivileged belligerents" do not. The distinction between the two groups is relatively obvious in traditional warfare, where combatants are organized and subject to clear command structures. Hacktivists, by contrast, may decide to defend their country by taking part in group attacks from their home or from a local café, say; the issue then becomes whether or not they are to be considered combatants with rights, or "unprivileged belligerents" without them.

The following section from the Tallinn Manual shows the experts floundering here -- and just how hard it is to come up with sensible rules for this "cyberwar" stuff:

Combatant status requires that the individual wear a 'fixed distinctive sign'. The requirement is generally met through the wearing of uniforms. There is no basis for deviating from this general requirement for those engaged in cyber operations. Some members of the International Group of Experts suggested that individuals engaged in cyber operations, regardless of circumstances such as distance from the area of operations or clear separation from the civilian population, must always comply with this requirement to enjoy combatant status.

So if you're ever tempted to engage in a little patriotic hacking into enemy computers, please don't forget to put on your uniform first...

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We've been talking a lot about CFAA reform lately, but law professor Eric Goldman is taking it a step further. He's written a fantastic piece for Forbes that explains why the whole concept underlying the CFAA is a failure and should be almost entirely done away with. The key part is the theory underlying the CFAA is an attempt to apply the age-old concept of "trespass to chattels" online, in the theory that the online world can be considered not unlike the offline world. Except... it's not so simple. Not at all.

Stretching the ancient doctrine of trespass to chattels to apply to Internet activities has been an experiment in law-making. Unfortunately, I think the experiment has failed completely. The CFAA and state computer crime laws initially were designed to restrict hackers from breaching computer security—a sensible objective that, as I discuss below, should be preserved. The expansion of these laws to cover all sending or receiving of data from an Internet-connected server hasn’t worked...

He goes on to point out that there have been massive unintended consequences of trying to apply an offline concept to a very different online world, and to also note that other existing laws can already handle many, if not potentially all, of the scenarios that people normally fear concerning malicious computer hacking.

Indeed, because legal doctrines already overlap so extensively, we almost never see an online trespass to chattels claim asserted on a standalone basis. Instead, an online trespass to chattels claim is usually just one of numerous legal violations asserted against the defendant. These doctrinal overlaps mean we usually don’t need online trespass to chattels either to supplement the more squarely applicable claims or to act as a “gap-filler” to plug the rare and narrow holes left by the other legal doctrines.

And thus, his recommendation is basically to gut the CFAA almost entirely:

1) Repeal most provisions of the CFAA (that don't relate to government-run computers) and preempt all analogous state laws, including state computer crime laws and common law trespass to chattels as applied online. Note: without dealing with analogous state laws, reforming the CFAA is an incomplete solution.

2) Retain only the (A) restrictions on criminal hacking, which I would define as the defeat of electronic security measures for the goal of fraud or data destruction (and some of these efforts are already covered by other laws like the Electronic Communications Privacy Act), and (B) restrictions on denial-of-service attacks, which I would define as the sending of data or requests to a server with the intent of overloading its capacity.

3) Eliminate all civil claims for this conduct, so that only the federal government can enforce violations.

4) Specify that any textual attempts to restrict server usage fail unless the terms are presented in a properly formed contract (usually, a mandatory click-through agreement).

It's difficult to argue with these suggestions, which is probably why most of Congress will likely instead ignore them.