Capital One Breach: Whose Liability Is It Anyway?
Capital One suffered a breach of data that was stored on Amazon Web Services' infrastructure and stolen by a former AWS employee. But it's far from clear whether Amazon shoulders any liability in the incident.
August 01, 2019 at 09:30 AM
4 minute read
Earlier this week, Capital One Financial Corp. announced a breach impacting the personal information of approximately 100 million people in the United States and 6 million in Canada. The list of impacted data included names, addresses, credit scores, Social Security numbers and bank balances.
Around the time of the announcement, the Department of Justice filed a criminal complaint in the U.S. District Court for the Western District of Washington against a woman named Paige Thompson, who allegedly used a misconfiguration in Capital One’s firewall to access buckets of data. It has since been confirmed that the data was stored on Amazon Web Services’ (AWS) cloud infrastructure.
But will Amazon will absorb any liability from the breach? The answer depends largely on the specifics of the arrangement between the two companies, but it seems unlikely.
“AWS contracts are very detailed and tend to favor Amazon, not surprisingly. … With contracts like that it’s always difficult to get some liability share onto Amazon or the cloud host,” said Christopher Ballod, a partner at Lewis Brisbois Bisgaard & Smith.
Contracts aside, the actual circumstances of the breach itself would also tend to suggest that any liability would be placed squarely at the feet of Capital One. According to the Capital One news release announcing incident, the configuration vulnerability that was exploited is not specific to the cloud.
A representative for AWS told Legaltech News that its cloud-based infrastructure was not compromised in any way and functioned as designed. The representative added that users also maintain full control over any applications they build on top of AWS.
According to Doug Brush, vice president of cybersecurity solutions at Special Counsel, such an arrangement is not unusual among cloud providers and their patrons. He said it’s up to the buyers of cloud services to do the necessary configurations, and compared the transaction to purchasing a new car.
“You can take it off the lot, but at that point once you start driving it’s your responsibility to be sober, put on a seatbelt, obey traffic signals. Really, you can buy a secure product but a lot of the liability and responsibility of maintaining that security comes onto the owner,” Brush said.
Still, one factor that could pose a potential complication is that Thompson, according to Bloomberg News, was a former AWS employee. Per Ballod, her employment history with the company could defeat any contractual limitations of liability in place, but only if it’s shown that she somehow used proprietary information in order to execute the breach.
“I think it would have to do with what she was exposed to prior during her employment, what Amazon did insofar as making it so she couldn’t take advantage of information she had,” Ballod said.
He pointed out that companies are not required to revamp their security posture every time they shed an employee. But protecting against potential intrusions from people who are intimately acquainted with a system begins well before a parting of ways.
Brush emphasized the importance of regularly vetting employees and reviewing access controls, particularly pertaining to people who have a deep knowledge of how something works and are preparing to depart.
“There’s always going to be that challenge of [someone that] has a little bit more knowledge than somebody else on the outside,” Brush said.
Even if the hacker in question doesn’t have familiarity to fall back upon, data exposures don’t seem to be going anywhere any time soon. The Capital One breach wasn’t even the first instance where data was left exposed due to improperly configured AWS infrastructure.
In June 2017, cybersecurity company UpGuard discovered that an AWS bucket belonging to GOP data firm Deep Root Analytics, which held the personal information of more than 198 million registered U.S. voters, was exposed for anyone to access online.
What’s more, according to a Bloomberg story published last month, information management company Attunity also left internal information belonging to Ford Motor Co. on unsecured AWS servers.
Is there a common thread? Brendan Dolan-Gavitt, a professor at New York University’s Tandon School of Engineering, pointed out that companies are often attempting to strike a balance between a level of access that allows for easy collaboration among various departments while not leaving important information hanging out in the open.
Based on the users he’s spoken to, finding that balance on AWS can be difficult.
“[AWS has] to do sort of more work at making sure the defaults are secure and making sure that it’s really easy to get a configuration that is secure,” Dolan-Gavitt said.
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