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Malicious Cyber Attacks Could Cost U.S. $100B Annually: McAfee

cyber-crimeThe cost of cybercrime and cyber espionage in the U.S. could reach $100 billion annually, according to a report by cyber-security company McAfee and Washington’s Center for Strategic and International Studies.

The predicted amount—admittedly a “rough guess”—is far lower than previous estimates by McAfee of $1 trillion, but the firm says although the estimate will grab headlines, the “heart of the matter is in the effect on trade, technology and competitiveness.”

The report becomes a call for better data to come up with a more precise figure for the cost of cybercrime and cyber espionage. Attaching a number to the costs associated with these types of crimes is currently “unattainable,” the report says.

“The malicious cyber activity involve more than the loss of financial assets or intellectual property,” reads the report. “These are opportunity costs, damage to brand and reputation, consumer losses from fraud, the opportunity costs of service disruptions “cleaning up” after cyber incidents, and the cost of increased spending on cyber security.”

Data is currently incomplete. Data collection runs into difficulties of definition: What is a cybercrime? And how does one quantify the value of information that, for the most part, is not gone but is copied? Some companies conceal damages, or are unaware of the damage.

McAfee says the cost of cybercrime and cyber espionage to the global economy is probably measured in the hundreds of billions of dollars.

The range of total global cybercrime falls between $300 billion and $1 trillion, according to the study. In comparison, piracy costs the global economy from $1 billion to $16 billion annually, and drug trafficking $600 billion.

In the U.S., malicious cyber activity may cause between $24 billion to $120 billion in damage—comparable to car crashes, which cost the nation $99 billion to $168 billion, and pilferage, which creates up to $280 billion in damage a year.

To view a copy of the full report click here: http://www.mcafee.com/us/resources/reports/rp-economic-impact-cybercrime.pdf.

Photo Credit: i k o via Compfight cc

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