Privacy vs. Security: The Compliance Conundrum

Blackphone Could Create a Black Hole for Compliance

By: Ben DiPietro for the Wall Street Journal

The announcement this week of a smartphone that claims it doesn’t have a backdoor to allow access to law enforcement of intelligence agencies could create compliance problems for companies—while offering criminals a secure arena to conduct their illegal activities, says one security executive. The Blackphone by SGP Technologies is being marketed as a way for business executives to communicate safely when in foreign countries, and for individuals to keep the National Security Agency and other agencies from spying on them. But it can also be used by cybercriminals, terrorists and drug dealers to do their business in secret.

blackphoneWhile Blackphone and similar technologies that provide enhanced security can provide privacy for executives who travel overseas and who can be subject to industrial espionage by hackers and governments, Eric Friedberg, executive chairman of security firm Stroz Friedberg, said it’s unlikely many companies will roll them out for their employees unless there is a way for them to access the devices to make sure everybody is following all laws and regulations. “Without that they can have a real compliance problem because they can’t have individual employees encrypting business emails, business texts, business documents without the firm’s administrator having the encryption keys,” Mr. Friedberg said. ”That is a recipe for a compliance problem.”

The technology that allows Blackphone to operate without providing a backdoor for intelligence agencies is allowed because of an exemption in the Communications Assistance for Law Enforcement Act, Mr. Friedberg said. The law required technology companies to build in a backdoor to accommodate court-ordered wiretaps, but exempted Internet-based technologies such as those employed by Blackphone. The Obama administration is working to get the exemption removed, but Mr. Friedberg said he doesn’t think the effort will succeed, given the antagonistic atmosphere in Congress and the fears brought on by the NSA revelations made public by Edward Snowden. “I don’t think there is a snowball’s chance in hell that is going to happen. The Snowden revelations created such an unsettled landscape relating to government surveillance that I just can’t see the administration going to Congress now and Congress, for political reasons, taking up successfully the idea of expanding the government’s wiretapping authority.”

Posted in Compliance, Cybersecurity, Legal, Privacy, Privacy Laws, Regulatory, Risk Management
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