Cyber crime costs global economy $445 billion a year: report

LONDON Mon Jun 9, 2014 6:38am EDT

An illustration picture shows a projection of binary code on a man holding a laptop computer, in an office in Warsaw June 24, 2013. REUTERS/Kacper Pempel

An illustration picture shows a projection of binary code on a man holding a laptop computer, in an office in Warsaw June 24, 2013.

Credit: Reuters/Kacper Pempel

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LONDON (Reuters) - Cyber crime costs the global economy about $445 billion every year, with the damage to business from the theft of intellectual property exceeding the $160 billion loss to individuals from hacking, according to research published on Monday.

The report from the Center for Strategic and International Studies (CSIS) said cyber crime was a growth industry that damaged trade, competitiveness and innovation.

A conservative estimate would be $375 billion in losses, while the maximum could be as much as $575 billion, said the study, sponsored by security software company McAfee.

"Cyber crime is a tax on innovation and slows the pace of global innovation by reducing the rate of return to innovators and investors," Jim Lewis of CSIS said in a statement.

"For developed countries, cyber crime has serious implications for employment."

The world's biggest economies bore the brunt of the losses, the research found, with the toll on the United States, China, Japan and Germany reaching $200 billion a year in total.

Losses connected to personal information, such as stolen credit card data, was put at up to $150 billion.

About 40 million people in the United States, roughly 15 percent of the population, has had personal information stolen by hackers, it said, while high-profile breaches affected 54 million people in Turkey, 16 million in Germany and more than 20 million in China.

McAfee, owned by Intel Corp, said improved international collaboration was beginning to show results in reducing cyber crime, for example in the takedown last week of a crime ring that infected hundreds of thousands of computers known by the name of its master software, Gameover Zeus.

(Reporting by Paul Sandle; Editing by Pravin Char)

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Comments (2)
yurakm wrote:
It is interesting, what they actually estimate.

Probably the biggest cost component is not theft itself, but the spending on security. Anti-virus software and similar, of course, but also hardware (on a typical Windows machine, one CPU core works all the time to run the anti-viruses), and that all hardware, software, and networks have to be designed and maintained with attention to hackers.

As to the impact of intellectual property theft, it tend to be grossly exaggerated.

A typical case is when advocates of software companies point to DVDs crammed by stolen software sold for $5 at flea markets in developing countries. Then they list all the software in the disk: Professional or Ultimate version of Windows, Office, and tutti frutti, the complete set of Adobe software including $800 Photoshop, and even more exotic programs like AutoDesk or Matlab products. Finally they claim that the US software industry lost the total list price of the program, that is something like $5k, if not higher.

However, after police clumps down on the piracy and people start to buy legit software, it turns that all in what the general public is interested is home version of Widows, bundled with PC at about $15, and a home and student version of Office, that cost something like $100 for three computers. Corporations are buying site licenses of the same at $20 per seat or so. It follows that the losses are exaggerated by a factor of 100 or so.

Jun 09, 2014 8:04am EDT  --  Report as abuse
Overcast451 wrote:
AKA: “We need more control of the web, so we spin numbers to make it seem really bad.” – the globalists claim.

Jun 09, 2014 9:41am EDT  --  Report as abuse
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