Analysis: Is Sony getting a bad rap on its data breach?

Sony didn't show up for last week's Capitol Hill hearing on its massive data breach, thought to have affected more than 100 million video gamers. But that didn't stop Representative Mary Bono Mack from laying into the company, along with Epsilon, a marketing company that experienced a similar breach just weeks before.

"I am deeply troubled by these latest data breaches and the decision by both Epsilon and Sony not to testify today. This is unacceptable," said Mack, a California Republican, in her opening remarks. "The single most important question is simply this: Why weren't Sony's customers notified sooner about the cyber-attack?"

Sony told customers that their personal information had been stolen in a breach of its PlayStation Network on April 26, about a week after figuring out that it had been hit by hackers. While that may not be quick enough for many gamers -- already vitriolic because their online gaming services had been yanked -- it's actually a pretty quick notification, especially for a breach of this magnitude, according to many data breach and security experts.

"I was stunned at the reaction, that people were saying a few days was too long," said "Dissent," the anonymous operator of the Databreaches.net website, and a close tracker of data breaches. "A year ago, if somebody notified you in less than two months, that was considered really fast. I think now the public has this expectation that they're going to be notified right away."

In late April, it seemed that Sony could do nothing right. Criticized for dragging its heels, the company published information about the breach before it fully realized how deeply it had been compromised. It then had to undergo a series of embarrassing corrections. It discovered that a second network, Sony Online Entertainment, had also been hacked, and then had to admit that bank card numbers had indeed been stolen, contrary to its earlier assessment.

In fact, it's common for companies to learn that breaches are more serious than first thought. That's what happens as security experts are brought in and the forensic investigation progresses. Sony just had the misfortune of having its investigation scrutinized, said Rob Lee, a computer forensics instructor with the SANS Institute. "Their story changing is actually quite normal," he said. "The fact that this is public is what makes it abnormal."

Google, for example, waited a month before going public with details of its December 2009 cyber-attack. That gave the company time to figure out the full extent of the incident before subjecting it to public scrutiny.

Sony's greatest faults were confusing its customers by going public with information before it was ready, and storing old, encrypted financial data belonging to thousands of users, said Beth Givens, director of Privacy Rights Clearinghouse. But far worse breaches have received much less attention, Givens said.

For example, in March health care services provider Health Net lost medical data, Social Security numbers and financial information belonging to 1.9 million customers. With Social Security numbers, identity thieves could seriously disrupt the lives of Health Net's customers -- Sony says that the vast majority of its victims had little more than their names and e-mail addresses stolen.

And while there has been little coverage of the Health Net breach, the New York Times has called on Sony to provide a credit monitoring service known as a security freeze to its 102 million affected customers. A security freeze would stop ID thieves from opening new accounts, but it "makes no sense" in the Sony case, Givens said. That's because criminals can't establish fake financial accounts with the Sony data. "In the Sony case, Social Security numbers were not compromised. It's credit card numbers and debit numbers," she said. "A security freeze is overkill."

Still, the lesson from the Sony breach may be that customers are fed up with companies that don't take their privacy seriously, and expect to be told about data breaches as soon as they happen.

"This is the direction that we're going," said Pete Schlampp, vice president of product management with Solera Networks, a seller of network security tools. "The public's expectation is to be notified immediately."

Robert McMillan covers computer security and general technology breaking news for The IDG News Service. Follow Robert on Twitter at @bobmcmillan. Robert's e-mail address is robert_mcmillan@idg.com

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