Corporate espionage: Not if, but when

Corporate espionage is defined as the theft of commercially valuable information. This may be the secret formulation of a new product, but equally it could be the names and salaries of senior executives or simply the date of your next marketing initiative.

This type of corporate crime costs the world's 1,000 largest companies in excess of $45bn (£22.4bn) every year, according to research from consulting firm PricewaterhouseCoopers.

Some of the world's largest corporations have been targeted: for example, in 2000, Microsoft fell victim to what the company called "a deplorable act of industrial espionage" when hackers broke into the company's system and accessed Windows and Office source code. Hackers had access to the source code for up to three months.

In the pharmaceutical sector, Proctor & Gamble and Unilever became involved in a dispute over corporate espionage when Fortune magazine reported that P&G had been involved in illegal corporate espionage against its archrival. Agents appointed by P&G were alleged to have misrepresented themselves as market researchers and used various other methods to collect information about its rival.

In 2006, two hackers were extradited from the UK to Israel when it was alleged that they had developed and sold spyware which was used by companies to spy on rivals in their native Israel. Three private investigation companies in Israel were alleged to have sent emails with Trojan horse packages designed to evade detection by security tools.

"What you need to know is that this is happening more than ever before, and on a bigger scale than ever before," warns Toralv Dirro, a security strategist with McAfee. "Any business that derives competitive advantage from information should be concerned about this issue."

Corporate espionage has increased rapidly in the past decade, as more information is put onto corporate networks — and potentially within the reach of hackers, Dirro explains. Certainly, PricewaterhouseCoopers reported that corporate espionage losses doubled between 1990 and 2000.

Knowing whether you're at risk of corporate espionage isn't easy, admits Paul King, a senior security advisor with Cisco UK. In fact, you could be a victim of corporate espionage and never even realise it, King says. "At Cisco, we don't ask ourselves why we might be at risk of this stuff, we ask why not?" he says. The company's security experts constantly scan the internet for reports of attacks on other organisations, and assess their own risk to similar attacks.

It's difficult to know exactly how common corporate espionage is because most victims never report the attack to the police, fearful of the consequences of going public, says King. And is a hacker is sufficiently skilled, many companies won't even realise they've been attacked. "I think the best we can do is monitor our systems carefully and if we hear of an attack on another organisation, ensure that it couldn't affect us," he says.

The question isn't whether you know you're vulnerable to corporate espionage, it's knowing how vulnerable you could be, adds King. "If your chief executive says he's not a victim of this stuff, how confident is he? And the only way to be really confident is to be looking hard for it."

The first step in corporate-espionage protection is to close the most obvious loopholes — those that can be exploited by hackers without even breaking the law. "We're seeing massive growth in something called Google hacking," says Rhodri Davies, a technical architect with security specialist Vistorm. "This is the process of using really smart Google searches to find information left open on web servers. It's unsportsmanlike, but definitely not illegal."

With Google hacking, hackers can routinely find information on projects and personnel, and the file names of confidential documents, even if they cannot access the documents themselves. "You can easily automate searches, so that if a document is online even briefly, you'll be emailed that search result," says Davies. The danger is that this information will then be used as the basis of an illegal attack, enabling a hacker to pretend to be inside the company, or to launch a social-engineering attack.

Security companies have seen a dramatic increase in what's known as "spear phishing", a highly targeted phishing attack where a single executive may receive an email that appears to be from an authorised partner or supplier, relating to a project that isn't widely known outside the company. "The usual trick with this sort of email is to encourage the user to open a file, which will launch a Trojan, potentially giving someone access to the whole network," says Toralv Dirro, a security strategist with McAfee. "We have been seeing an awful lot of these in the last year or so."

How do you know if you have been a victim of corporate espionage? In many cases, you'll never know, says Dirro. "If it's a skilled hacker, they will have used Trojans to ensure the intrusion detection system isn't triggered." Security experts recommend regularly conducting penetration testing (including looking for search vulnerabilities) to protect against this kind of attack. However, to protect against illegal hackers attempting corporate espionage, the best advice is to know your data.

Audit your corporate data and identify what information is potentially sensitive and therefore vulnerable to attack, says Dirro. Next, separate this…

…information into dedicated areas of the network, and consider separating highly sensitive information entirely. "If you have a highly confidential R&D project, I would consider putting it on its own network, with no external links whatsoever," says Dirro. "Regardless, you should have a clear idea of your data structure, so you know who is accessing sensitive data and what they're able to do with it."

There isn't a single technical solution to corporate espionage, adds Cisco's King. "If there was, we'd be selling it," he says. However, companies can take steps to minimise the risks it poses. King's key advice is not to rely on reactive security systems, which will warn you only when something specific happens. Although a good intrusion detection system and firewall are essential, they aren't enough. "If you're waiting for an alarm to go off, that's not good enough, and it won't alert you to most corporate espionage," King says.

For example, you may want to investigate the latest data log protection systems. These software tools can "mark" confidential data with a virtual watermark, which prevents it from being copied to a mobile device or distributed via email. "The technology is relatively new, and can be quite difficult to get up and running, but once you've done the upfront work they're highly effective," Dirro says.

In addition, King recommends routinely checking through IDS log files and access logs looking for attacks or patterns of unusual activity. "We have a product that monitors all our log files from routers and firewalls and looks for anomalous behaviour," says King. "It's different from only reacting to something you know has happened."

It's also important to pay attention to less sophisticated forms of information theft. "Educate people on risks that may seem small, like using a laptop on a plane," advises King. Cisco executives are routinely provided with plastic privacy shields that prevent so-called shoulder surfing, and the IT department provides training videos that help make people more aware of the risks in discussing confidential projects in public.

"Sometimes you can be at risk in the most public places," says King. "For example, someone at a trade show might ask you a question that is designed to help them later to do some kind of social engineering." Since producing videos on this topic for the corporate intranet, King's team has received many more calls from employees who say they have received suspicious telephone enquiries.

The vast majority of corporate espionage attacks have the involvement of someone inside the company, argues Mark Schettenhelm, a security consultant with Compuware and a Certified Information Privacy Professional (CIPP). "We've done such a good job of blocking hackers and spam from outside that it's easy to forget the threat from people inside the company who have all the authority and access."

However, King believes it's important to keep corporate espionage in perspective. "We want security to enable the business, and we're not going to lock down systems and stop people doing business," he says. For this reason, Cisco does allow employees to use memory sticks and mobile devices, but with appropriate encryption and other security measures.

The best approach is to accept that providing employees with access to sensitive information will always carry some risk, but to mitigate that risk as far as possible, says Schettenhelm. Compuware provides a range of tools designed for "application auditing", which basically means monitoring who uses software, and what they do with it. One of the biggest challenges of any company that has been hacked is knowing the extent of the breach, and application auditing can also help in this respect, showing which screens and fields of data were viewed by an individual user.

"It means if there is a breach, you can easily see where it happened, who did it, and what was breached," says Schettenhelm. "It also protects employees from false accusations, because it shows where there was no inappropriate action."

Application auditing can be combined with data mining tools to reveal patterns of usage and alert managers to anomalous activities. For example, you could monitor the activity level in a customer service centre to show that a typical agent accessed 100 records per day, while one employee is regularly accessing 500 records. "That type of spike might indicate a problem, and further investigation may show which sort of records he is accessing, and whether it tallies with the number of inbound calls they were handling," says Schettenhelm. "You can then ask, why did you need that screen for that call?"

This type of technology works best when sensitive data is held on separate screens, Schettenhelm adds, so that you can track exactly who is accessing information such as credit-card details or medical records. It will also help in preventing future problems, because auditing will show which screens really are needed to do a specific job — allowing access to be restricted to any information that isn't strictly needed.

Of course, an organisation can't simply block access to all confidential data — developing new products is difficult if the engineers can't access the plans, after all. But analysing network traffic can show who is downloading information and at what times. "A common trigger which might indicate a problem or a hacker is someone accessing files outside office hours, when they can't be seen by colleagues," says Schettenhelm.