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WannaCry exposes glitch in tech business model
May 15, 2017 / 2:40 PM / in 6 months

WannaCry exposes glitch in tech business model

LONDON (Reuters Breakingviews) - A customer skimps on software upgrades; a malicious program storms its computers. As far as the blame game goes, this weekend’s global malware attack seems straightforward. In reality, things are more complex.

FILE PHOTO: A sign marks the Microsoft office in Cambridge, Massachusetts, U.S. January 25, 2017. REUTERS/Brian Snyder/File Photo - RTS16F9F

A piece of “ransomware” called WannaCry blocked access to computer files in at least 150 countries on Friday, including those of the British National Health Service, Spanish telecom group Telefonica and Japanese carmaker Nissan. This could have been prevented, it turns out, had victims upgraded their old Microsoft Windows software. Instead, the U.S. maker of the operating system says they were “fighting the problems of the present with tools from the past”.

Users need to be less blasé. But it’s telling that Microsoft released a free upgrade for refusenik users anyway, to stem the damage. Tech companies should fear this precedent, which already exists in other industries. Financial services groups, for example, are now accustomed to the idea that unsophisticated users need protecting from themselves.

Elsewhere in tech, consider Uber and Facebook. Detractors of the car-hailing service claim it has a responsibility to the drivers who use it, and should be regulated like a transport company rather than an intermediary. For Facebook, the debate is over who gets blamed for violent or abusive content on the social network’s sites. Strictly speaking, both companies provide a platform, and what users do with it is up to them. But regulators, customers and rivals often don’t see it that way.

The Internet of Things will place the burden more clearly on suppliers, especially where those things can cause harm. Imagine a virus were to cause accidents in electric cars. Even if the customer had knowingly bypassed a security upgrade, it’s unlikely that the carmaker would escape censure. One solution is to build the potential cost of all future upgrades into the upfront price. Another is to make the product unusable unless upgraded. Some governments may demand that product liability apply to software, which it typically doesn’t.

Ultimately, if suppliers have to cushion their customers, it will hit profitability. Facebook plans to nearly double the number of staff watching for questionable content to 7,500. Yet its users eyeball 100 million hours of video a day. Tech has the power to change the way people live, but with that power will come responsibility, and also cost.

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