I would like to make a wager on this law being ignored the first time Samsung or another chaebol violates it and is facing a fine equal to 10% of revenue. I can almost guarantee it, it’s a high enough fine to turn some low-margin businesses from profitable to unprofitable for the year and there’s no such thing as a secure computer system. The only way to guarantee compliance is to not store any data which isn’t exactly reasonable for some business models.
Wow! :O Finally, a legislator with enough balls to put up something that _might_ (just might) make corporations _actually_ care about security and privacy! I can't wait for this to start being adopted in other countries. It's about time!
You can just do what my university did, hire a small shell firm with 3 employees to hold all your data, and when it got hacked they just went bankrupt and we switched to a new shell firm with similar form and function.
Minimizes money usage and does not require any security investments
It feels better only as long as everybody else cares too. Being the only one competent in a room of imbeciles is a terrible feeling.
Hmm, this is perhaps why we get socially-negative businesses that often have very friendly (and driven, and hard-working, and intelligent) internal cultures. Competency becomes a fault line. When it becomes obvious that a large fraction of humanity just doesn't give a shit, a small group of people who are competent and driven turn their efforts to taking advantage of people who don't give a shit. Thus creating industries like market-makers, cryptocurrency, advertising, and AI.
It feels better only as long as everybody else cares too.
Not sure who “everybody else” is in your statement, but as someone who founded a healthcare tech platform (since sold) [1], I spent 20 years caring about the many millions of patient medical records we held and making sure my team cared too. In my mind it wasn’t optional.
I did it because:
* it’s the right thing to do
* for professional pride
* and so I could sleep at night
And, at least at the beginning, I believed a data breach could be the death knell of the company. Over time the laissez faire attitude to data protection by the industry as a whole made it seem like it would be survivable.
I still walked away from it a wealthy man. Being competent and caring about your customers doesn’t have to mean failure like it seems everyone here thinks.
Every single tool being released since like 2024 is pushing everyone to care less and less and to let agents handle more and more. We are not trending towards increased quality, resilience and reliability - even though we've been obsessing over these things for the past 20 years.
Caring is orthogonal to profits and shareholder value. The one who cares the least wins unless economic incentives change this math, which is what these financial penalties work towards. Humans are tricky.
To defend against the threat OP talks about (intentionally under capitalized corporate entity to avoided liability), insurance should be required, and your cyber insurance underwriter will perform an audit as part of underwriting. It's effectively a bond against fuckery in this context.
You can care and be profitable, but it is usually cheaper to not unless regulatory mechanisms exist to internalize this potential externality. Can't rely on humans to do the right thing, some will not unless they feel pain for doing the wrong thing. Ergo, we build systems (legal, regulatory, technical, people) to encourage the desired target outcome(s).
I've worked with very profitable firms who care very little (and it shows in their systems and how they operate in this regard), and barely profitable firms who do everything right. What's the difference? Their culture, people, and internal incentives.
TLDR Security failures and data breach fines must be more expensive than the happy path and doing the right things. This encourages the happy path and doing the right thing, while discouraging doing not enough or nothing.
Why the middle man? Can't we make the law so that the University is still liable for the data beach because it's "their" data (collected/stored on their behalf) that is breached?
I think that still aligns the incentives, and University in this case has interest to make sure the data is stored properly.
It's childish of me I know, but if this actually goes through I will feel a twinge of delight at the refutation of all the HN commenters who have argued that such enforcement is unrealistic.
I would like to make a wager on this law being ignored the first time Samsung or another chaebol violates it and is facing a fine equal to 10% of revenue. I can almost guarantee it, it’s a high enough fine to turn some low-margin businesses from profitable to unprofitable for the year and there’s no such thing as a secure computer system. The only way to guarantee compliance is to not store any data which isn’t exactly reasonable for some business models.
Maybe those specific business models shouldn't exist, if they consistently risk harm to 3rd parties.
You legally have to hold transactions for years yk as a business
Probably a law targeted at foreign companies
Wow! :O Finally, a legislator with enough balls to put up something that _might_ (just might) make corporations _actually_ care about security and privacy! I can't wait for this to start being adopted in other countries. It's about time!
Or you get some shell firm/subsidiary to hold your data and no difference is made
Sounds great if all the following is true.
* Before Tax Revenue
* If the company is owned by another company, the revenue is the total of all companies owned by the highest level parent.
* Includes Worldwide Revenue
* Includes companies based in all other Countries.
I would have went for 20%, but if he above applies I wish the US would do the same.
You can just do what my university did, hire a small shell firm with 3 employees to hold all your data, and when it got hacked they just went bankrupt and we switched to a new shell firm with similar form and function.
Minimizes money usage and does not require any security investments
Or … and hear me out on this one … care?
Sounds like something that costs money, if a university doesn't care I don't think most companies will.
Yes, being competent requires effort.
It certainly feels much better being an proactive member of society rather than a self-serving arsehole though.
So, there is that.
It feels better only as long as everybody else cares too. Being the only one competent in a room of imbeciles is a terrible feeling.
Hmm, this is perhaps why we get socially-negative businesses that often have very friendly (and driven, and hard-working, and intelligent) internal cultures. Competency becomes a fault line. When it becomes obvious that a large fraction of humanity just doesn't give a shit, a small group of people who are competent and driven turn their efforts to taking advantage of people who don't give a shit. Thus creating industries like market-makers, cryptocurrency, advertising, and AI.
Not sure who “everybody else” is in your statement, but as someone who founded a healthcare tech platform (since sold) [1], I spent 20 years caring about the many millions of patient medical records we held and making sure my team cared too. In my mind it wasn’t optional.
I did it because:
* it’s the right thing to do
* for professional pride
* and so I could sleep at night
And, at least at the beginning, I believed a data breach could be the death knell of the company. Over time the laissez faire attitude to data protection by the industry as a whole made it seem like it would be survivable.
I still walked away from it a wealthy man. Being competent and caring about your customers doesn’t have to mean failure like it seems everyone here thinks.
[1] https://www.meddbase.com/
Every single tool being released since like 2024 is pushing everyone to care less and less and to let agents handle more and more. We are not trending towards increased quality, resilience and reliability - even though we've been obsessing over these things for the past 20 years.
Caring is orthogonal to profits and shareholder value. The one who cares the least wins unless economic incentives change this math, which is what these financial penalties work towards. Humans are tricky.
To defend against the threat OP talks about (intentionally under capitalized corporate entity to avoided liability), insurance should be required, and your cyber insurance underwriter will perform an audit as part of underwriting. It's effectively a bond against fuckery in this context.
(cyber consultant and practitioner)
That's not what orthogonal means. Saying they are orthogonal means that you can care and be profitable.
You can care and be profitable, but it is usually cheaper to not unless regulatory mechanisms exist to internalize this potential externality. Can't rely on humans to do the right thing, some will not unless they feel pain for doing the wrong thing. Ergo, we build systems (legal, regulatory, technical, people) to encourage the desired target outcome(s).
I've worked with very profitable firms who care very little (and it shows in their systems and how they operate in this regard), and barely profitable firms who do everything right. What's the difference? Their culture, people, and internal incentives.
TLDR Security failures and data breach fines must be more expensive than the happy path and doing the right things. This encourages the happy path and doing the right thing, while discouraging doing not enough or nothing.
Why the middle man? Can't we make the law so that the University is still liable for the data beach because it's "their" data (collected/stored on their behalf) that is breached?
I think that still aligns the incentives, and University in this case has interest to make sure the data is stored properly.
Perhaps they should read https://en.wikipedia.org/wiki/Piercing_the_corporate_veil
That's legal?
similarly, most AI datacenters aren't directly owned by the frontier labs
guess who holds the bag if capacity needs collapse
Sure, but the real question is, "Will a judge not immediately see through this and punish them accordingly in any realistic case?"
Sort of like EULA's a lot of the "value" is incredibly theoretical.
That's like blaming Seagate when your harddisk fails.
No judge will fall for that. You should have made backups. And you are responsible for the data of your clients.
"through intent or gross negligence"
I'm not familiar with Korean law but that seems a rather high bar. I don't think we'll see many fines actually levied.
It's childish of me I know, but if this actually goes through I will feel a twinge of delight at the refutation of all the HN commenters who have argued that such enforcement is unrealistic.
The EU AI Act already levies 7% global annual turnover penalties for prohibited AI practices.
This feels like a really odd way to incentivize data breaches and/or not reporting data breaches.
Higher.