[ISN] Does Cybercrime Really Cost $1 Trillion?

http://www.wired.com/threatlevel/2012/08/cybercrime-trillion/

By Peter Maass and Megha Rajagopalan
ProPublica
Threat Level
Wired.com
08.01.12

Gen. Keith Alexander is the director of the National Security Agency and 
oversees U.S. Cyber Command, which means he leads the government’s 
effort to protect America from cyberattacks. Due to the secretive nature 
of his job, he maintains a relatively low profile, so when he does 
speak, people listen closely. On July 9, Alexander addressed a crowded 
room at the American Enterprise Institute in Washington, D.C., and 
though he started with a few jokes — his mother said he had a face for 
radio, behind every general is a stunned father-in-law — he soon got 
down to business.

Alexander warned that cyberattacks are causing “the greatest transfer of 
wealth in history,” and he cited statistics from, among other sources, 
Symantec Corp. and McAfee Inc., which both sell software to protect 
computers from hackers. Crediting Symantec, he said the theft of 
intellectual property costs American companies $250 billion a year. He 
also mentioned a McAfee estimate that the global cost of cybercrime is 
$1 trillion. “That’s our future disappearing in front of us,” he said, 
urging Congress to enact legislation to improve America’s cyberdefenses.

These estimates have been cited on many occasions by government 
officials, who portray them as evidence of the threat against America. 
They are hardly the only cyberstatistics used by officials, but they are 
recurring ones that get a lot of attention. In his first major 
cybersecurity speech in 2009, President Obama prominently referred to 
McAfee’s $1 trillion estimate. Sen. Joseph Lieberman, I-Conn., and Sen. 
Susan Collins, R-Maine, the main sponsors of the Cybersecurity Act of 
2012 that is expected to be voted on this week, have also mentioned $1 
trillion in cybercrime costs. Last week, arguing on the Senate floor in 
favor of putting their bill up for a vote, they both referenced the $250 
billion estimate and repeated Alexander’s warning about the greatest 
transfer of wealth in history.

A handful of media stories, blog posts and academic studies have 
previously expressed skepticism about these attention-getting estimates, 
but this has not stopped an array of government officials and 
politicians from continuing to publicly cite them as authoritative. Now, 
an examination of their origins by ProPublica has found new grounds to 
question the data and methods used to generate these numbers, which 
McAfee and Symantec say they stand behind.

[...]


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