Cyber Security Law, Regulation and IoT Devices: Telstra Report 2018

This essay examines the trends of IoT devices based on the Telstra Security Report 2018, analyzing the evolution and impact of this technology. It explores the increasing cyber security threats associated with IoT, including data breaches and cyber-attacks, and evaluates the legal and legislative considerations in place to address these threats. The essay reviews the current legal frameworks in Australia, such as the Telecommunications Act 1997 and the Crimes Act 1900, and discusses the role of regulatory bodies like the AIIA. It further analyzes the impact of the Australian Privacy Act and GDPR on protecting user data. Finally, the essay assesses future trends and recommends potential legal frameworks to protect individuals and companies from cyber threats, emphasizing the need for stricter regulations and proactive measures to safeguard data privacy in the face of rapid technological advancements.

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Cyber Security Law, Regulation and Policy
Telstra Security Report 2018

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In today’s competitive business world, companies are struggling to generate and maintain a
competitive advantage in the business in order to sustain their future growth. Investment in
advance technologies that increases the efficiency of the operations of companies and
improve communication resulted in providing a competitive advantage to organisations
(Hazen and Byrd, 2012). Along with companies, the use of these technologies assists people
to do their daily tasks in an efficient manner. The popularity of the internet makes it easier for
companies and individuals to access to online-based services to conduct their activities
effectively; however, these changes have also brought issues relating to cyber security
(Neghina and Scarlat, 2013). The threat of cyber-attacks has increased substantially which
negatively affect individuals and organisations. Telstra Security Report 2018 highlighted
various trends which possess many cyber security threats. One of these trends is the
popularity of the internet of things (IoT) devices which have become a cultural phenomenon
in the past few years. Telstra’s report predicted that the number of IoT devices would be
increased to 18.1 billion by 2022 (Telstra Global, 2018). It shows the rapid growth in the
technology; however, this growth also creates many cyber security related issues due to the
breach of private data of individuals and organisations which uses these devices. The
objective of this essay is to evaluate the trend of IoT devices based on Telstra Security Report
2018 and explore the application of legal and legislative considerations which affect this
technology. This essay will evaluate the past, current and future trends in this technology and
analyse the implications of the impact of these trends in the world. This essay will apply legal
and legislative considerations in relation to this trend in order to determine whether current
legal policies are enough to address these threats. Lastly, this essay will evaluate the
predictions relating to this trend in the future and recommend possible legal frameworks
which can be implemented in order to protect individuals and companies from its threats.
Telstra Security Report 2018 highlighted the growing risk of cyber-attacks as the number of
attacks increased substantially in 2017. Organisations are becoming more aware regarding the
importance of their security, and they are taking appropriate measures to maintain their cyber
and electronic security (Telstra Global, 2018). Still, there has been an upward trend when it
comes to growth in the number of cyber-attacks which not only resulted in the loss of
intellectual property (IP), but these attacks have also negatively affected the share prices of
companies and the confidence of customers in these companies (Telstra Global, 2018). These
attacks have publically embarrassed companies and brought threats of litigations for their
failure to protect the data of customers. For example, the data loss hacked resulted in

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impacting over 145.5 million customer accounts which is one of the biggest data breaches
reported to date (Telstra Global, 2018). The recent scandal of Cambridge Analytica highlights
that the data of Facebook users can be used for illegal practices such as finding potential
voters that support the Presidential Campaign of Donald Trump which assist in his win
(Chang, 2018). Based on these attacks, the security industry is changing rapidly to stay one
step ahead of these attacks to ensure that the data of individuals and customers are protected.
Along with the security industry, new regulations and laws are implemented by the
government in order to ensure that the appropriate legal framework is implemented to protect
the interest of victims and reduce the number of these crimes. The security report issued by
Telstra in 2018 provided that cybercrime is a lucrative business because it is estimated to cost
the world a staggering US$6 trillion annually by 2021 (Telstra Global, 2018). This amount is
expected to increase from US$3 billion in 2015. The types of cybercrimes are also increasing
with time which makes it difficult to apply previous policies and laws to protect individuals
and companies from them. Security threats such as Ransomware are proliferating as provided
by the study of Carbon Black in 2017 in which it was estimated that the Ransomware
economy has increased at a rate of 2,500 percent (Brewer, 2016). Other astounding statistics
are given by the Australia government which provided that Ransomware costs approximately
AU$1 billion per year (Telstra Global, 2018). It highlights the importance of implementation
of stricter legal regulations to ensure that the impact of these attacks is reduced and the cyber
criminals are punished for their options. There are many new threats which are on the horizon
that have been native to IT systems.
One of these trends is the popularity of the internet of things (IoT) devices which are
highlighted in the report of Telstra. This is a major trend which has become popular with the
ease of availability of high-speed internet connection in people’s homes. It is referred to a
system of interrelated computing devices, digital machines, objects, mechanical and unique
identifiers which have the ability to transfer data over a network without the assistance of
human or other computers (Gubbi et al., 2013). This technology has become prominent in
markets such as the United States, the United Kingdom and Australia due to the popularity of
smart home appliances and wearable devices. The use of these smart appliances enables
people to connect all these devices with one another so that they can communicate with each
other by sharing the data. This data sharing enables them to offer personalised services to the
users that make the whole experience easy. These devices collect private data of users and
share it with other devices in order to work appropriately. However, the popularity of these

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devices has raised many cyber security concerns as well. Since this technology is in its early
stages, there is a lack of security policies to ensure that the private data of users is stay
protected from cyber criminals (Lee and Lee, 2015). Telstra Security Report 2018 highlighted
many of these issues in the report which shows how this technology can be misused by cyber
criminals in order to collect private data of users.
As per the report, one of the biggest distributed denials of service (DDoS) attack of 2017 was
based on the use of IoT devices. This attack was called Mirai botnet in which the cyber
criminals take control over unsecured IP cameras, home routers and other electronics devices
(Kolias et al., 2017). Through IoT technology, these devices were connected with each other,
and they were able to share details with each other. The cyber criminals misused these
features, and they also collect the private data of users. After breaching the security of a
single device, there were able to hack into other devices as well through the internet routers
(Kolias et al., 2017). They were able to spy on people through their security cameras without
their knowledge. They were also able to listen to their conversations and store this data in
order to blackmail them. The users whose data were being breached were not aware
regarding this attack, and they continued with their life without taking any security measures
(Hazen and Byrd, 2012). One of the key reasons for this attack was the lack of effective
security infrastructure included in the IoT devices by their manufacturers. Telstra’s report
also highlighted that malware attacks on private data of individuals and organisations which
become possible through misuse of these IoT devices.
Although the IoT technology poses many security threats; however, the legal framework to
manage these risks are not appropriate to manage these risks. In the case of Australia, the
government has implemented various regulations in order to ensure that these attacks are
regulated in an appropriate manner (Madakam, Ramaswamy and Tripathi, 2015). However,
the advancement of technology is rapid which makes it difficult for the legal system to keep
up with these changes. The Australian Information Industry Association (AIIA) is one of the
key regulators that guide the use of IoT technology in the country. Various key guidelines are
issued by the AIIA in order to make sure the security of users is maintained while they use
IoT devices. As per these guidelines, provisions regarding communication and understanding
of what IoT technology is and how it affects the users must be given by companies. They
have to maintain right balance between innovation and interoperability of systems and data to
ensure that privacy and security of users are maintained (AIIA, 2019). Security data storage
capacity is another key requirement which IoT manufactures have to take into consideration.

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The Telecommunications Act 1997 (Cth) is the key act that centrally regulates the
manufacturing and use of IoT technology in Australia. This act is also referred as Telco Act
which has assisted in removing all the barriers when it came to the establishment of
telecommunications practice in the market and established an industry-specific regime that
prohibits anti-competitive conduct framework (Flannery, 2018).
The operations of IoT devices are generally carriers or carriage service provisions based on
which these companies have to comply with the guidelines provided by the Telco Act to
ensure that they take appropriate actions to ensure the security of their users. In the case of
New South Wales, the Crimes Act 1900 also provides provisions regarding prohibition and
punishment for unauthorised access to the computer system. It is considered as criminal
activity in both state and federal legislation which include the Crimes Act and the
Commonwealth Criminal Code. Section 478.1 of the Cod provides provisions regarding the
criminalisation of the practice of unauthorised access to restricted data (Legislation, 2019).
As per this section, the maximum penalty for this act is two years imprisonment. In the case
of DDoS attacks conducted by cyber criminals through IoT devices such as Mirai botnet
attacks, then the provisions are given under section 477.3 of the Code. As per this section,
unauthorised impairment of electronic communication is considered as an offence which is
divided into two elements (Legislation, 2019). The first element is related to the person who
is engaged in unauthorised impairment of the electronic communication and the second
element provisions provision regarding the person who knew about this unauthorised
impairment. As the case being, cyber criminals can suffer a maximum penalty of 10 years
imprisonment (Legislation, 2019).
These are the current legislative policies implemented by the government in order to regulate
the attacks under IoT technology to ensure that the privacy of users is being protected. These
compliances are also highlighted under Telstra Security Report 2018. In this report,
provisions given under the Australian Privacy Act are also included. These provisions are
incorporated by the government to protect the privacy of individuals and secure their data
(Telstra Global, 2018). Various recommendations and step by step guides are also given for
businesses to ensure that they protect the privacy of their user. Moreover, the Australian
Government is also likely to comply with the provisions of the GDPR to ensure that a high
level of protection of the private data of users and explicit knowledge regarding where their
data is stored. The GDPR or General Data Protection Regulation imposes new fines and
penalties on corporations to ensure that they take data privacy of users more seriously. These

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provisions also protect the private data of IoT technology users since these companies collect
private data as well (Wachter, Mittelstadt and Floridi, 2017). As per these policies, the
companies have to implement provisions to make sure that they take stricter measures in
order to protect the privacy of their users which are protected from unauthorised access. They
also have to maintain transparency regarding how the users’ data is collected and how it is
used by the company. As per these provisions, new fine of €20 million can be imposed on
companies which failed to comply with these policies (Wachter, Mittelstadt and Floridi,
2017).
Moreover, the legal framework given by the Australian Prudential Regulation Authority
(APRA) and Australian Signals Directorate (ASD) also governs the operations of companies
that manufacture and sell IoT devices in the country. As per these guidelines, various security
and privacy standards have to maintain by companies to ensure that they take stricter
measures to ensure that the privacy of users is maintained (Burdon, Siganto and Coles-Kemp,
2016). The Australian Competition and Consumer Commission (ACCC) also regulate
carriers who offer IoT devices to customers. The objective of these regulations is to prohibit
anti-competitive practices and ensuring that customers’ rights are protected from violation.
However, these provisions are not effective when it comes to ensuring that the data of uses
remain protected from unauthorised access. The recent attack of Mirai botnet as highlighted
by the reported of Telstra shows that these policies are not enough to ensure that private data
of users is protected (Bertino and Islam, 2017). The rapid growth in IoT technology enables
the devices to go from home appliances to car accessories to other areas where no such
technologies were available before. However, these legal provisions remain constant for
years without appropriate changes to ensure that they govern the process in the technology to
protect the interest of companies and customers.
The growth in IoT technology will have many positive and negative implications on the
world that we live in. The growth in this technology enables them to stay connected through
different devices without losing control over their tasks. This technology creates a ubiquitous
system in which all the devices can connect and simultaneously communicate with each other
to cater to the needs of customers (Zanella et al., 2014). The IoT devices provide tremendous
values to their users by offering them a wide range of convenient solutions which save not
only their time but money as well. Along with benefiting the lives of individuals, the use of
IoT devices assists in saving the lives of millions by helping the government in efficiently
allocating necessary resources. These devices also enable health professionals to ensure that

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they effectively discharge their duties by utilising this technology to keep track of different
patients and their records. Telstra’s report also highlighted these benefits and made various
provisions regarding the future of IoT technology and how this technology is capable of
changing the lives of individuals across the globe (Telstra Global, 2018). However, there are
negative implications for the popularity of this technology as well. One of the biggest risks
carries by the IoT technology is the threat of intrusive monitoring since most people use these
devices as monitoring devices to protect their houses and loved ones (Da Xu, He and Li,
2014).
However, misuse of this technology can result in increasing the risk of intrusive monitoring
which is an unacceptance invasion of privacy of individuals and corporations. It also poses
many risks associated with unauthorised access to intimately personal information of users
which could have disastrous results. (Da Xu, He and Li, 2014) Past incidents including the
Mirai botnet attack highlighted the negative implications of the use of IoT devices and how
unauthorised access can adversely affect millions of people by invading their privacy. These
devices contain detailed information regarding individual behaviour, circumstances, personal
attributes and family background of users which may lead to discriminatory practices. The
rate of hateful crimes has increased substantially in the past few years in which cyber
criminals are targeting people who belong to a particular group (Stankovic, 2014). These
criminals target these individuals based on their race, caste, colour or gender to promote
racist beliefs. They are able to achieve these targets by misusing IoT technology which
enables them to gain access to the private life of its users. Another major issue with the IoT
technology is that all the newly accessible and collected information is necessary to be stored
somewhere to ensure that users and devices are able to access them whenever they want
(Zanella et al., 2014).
However, the stored data is vulnerable to cyber-attacks in case companies did not encrypt it
during transmission. The encryption technology in the IoT devices is not able to perform
effective encryptions to ensure that data is stored during the transmission process because it is
most vulnerable at that time. The database system of companies is also vulnerable to cyber-
attacks due to which millions of people can lose their private information (Wortmann and
Fluchter, 2015). A good example is an attack on cloud service of Apple Incorporation called
iCloud in which private pictures and videos of over 500 celebrities were collected by a cyber-
criminal. The cloud service enables users to store their files on the cloud which they can
access anytime and anywhere as long as they have an internet connection (Arthur, 2014).

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However, a cyber-criminal was able to hack into this database and collect private pictures of
these mostly female celebrities. Many celebrities were blacked by the cyber-criminal who
demanded ransom to avoid leaking these pictures (Arthur, 2014). This example should the
disastrous impacts of the future of IoT technology and how individuals and organisations
which use these services are likely to suffer consequences unless they take stricter measures
to protect the data of their users. These are the past and present influences of IoT technology
and its impact on the future.
However, in the future, these threats are likely to increase as this technology become easier to
be accessed by billions of people. In many developing nations, the popularity of IoT
technology has started to increase; however, the legal system is not ready for these changes
which make it difficult for users to legally hold the manufactures responsible for breach of
their private data (Xia et al., 2012). The number of IoT devices is also increasing, and it is
likely to reach 18.1 billion by 2020 as per the report of Telstra which shows that the
government should take appropriate measures to protect the privacy of users (Telstra Global,
2018). Regulation of the telecommunication industry did not consider the popularity of
machine-to-machine (M2M) communication due to which these regulations did not cater to
all aspects of IoT technology. Due to M2M communication, it becomes difficult to impose
regulations to protect the privacy of users since the manufacturers or developers are not
involved in this process (Theoleyre and Pang, 2013). It highlights the requirement of
adopting effective regulations to ensure that this issue can be resolved and improved M2M
communication technologies can be adopted by the companies to protect the data of users.
The legislative consideration given in the Telecommunications Act 1997 (Cth) is not adequate
to keep up with the rapidly changing and growing IoT technology (Caron et al., 2016). Many
authorities such as ACCC, AIIA, APRA, ASD and others are not able to ensure that
appropriate legislative framework is put in place to protect the private data of individuals.
The legal obligations imposed by the Privacy Act, Crimes Act and Commonwealth Criminal
Code are not enough to impose legal obligations on companies to ensure that the private data
of users is protected from unauthorised access (Caron et al., 2016). The massive threat to the
privacy of users brought by the popularity of IoT technology as shown by Mirai attack
requires adaptation of a new legal framework to ensure that users remain protected from
unauthorised access. In the future, people’s home alliances to vehicles to appraisals will be
connected through smart devices which will lead to the collection of a large number of users’
data which is necessary to be protected from cyber criminals (Meidan et al., 2018). Therefore,

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it is important that the government take stricter measures to ensure that companies that
manufacture and develop these devices take necessary precautions to protect the privacy of
their users. These future predictions show the lack of current legislative framework to impose
obligations on parties that manufacture IoT devices. New policies should improve by the
government by introducing cyber security laws, regulations and policies to maintain the
privacy of users.
Based on the above observations, it is recommended that one of the key areas which are not
covered by the cyber security laws is the obligation of manufacturers. Generally, developers
of IoT devices are not held responsible by the government which makes it easier for them to
engage in unethical trading practices (Neghina and Scarlat, 2013). In order to increase their
customer base, these companies mass produce IoT devices to sell them to their customers.
Any malfunction or bug which goes unnoticed can pose a serious threat to the breach of
privacy of millions of individuals and organisations which uses these devices. The
government should impose obligations on these manufacturers by introducing stricter laws in
the Telecommunication Act (Cth) (Richardson et al., 2017). These laws should require these
companies to maintain transparency in their manufacturing process by disclosing the security
actions taken by them to protect the privacy of users. Mirai botnet was a result of failure
caused by the manufacturer in the production process to maintain the security of devices
which was breached by cyber criminals to collect private data of individuals (Cui, 2016).
Therefore, the government should ensure that only those companies are able to sell IoT
devices which comply with a stricter manufacturing process to ensure that the data remains
secure. Another key recommendation is changed in the Australian Privacy Act to ensure that
these companies did not store the private data of individuals in their database. These changes
should focus on enforcing companies to store the private data of users’ right on the devices
rather than the cloud storage of companies.
These regulations will reduce the changes of data breach when it is transmitted to the servers
of the companies. A good example is the IoT devices launched by Apple such as smart
speaker and smart watch which did not send the data to the companies and store it inside the
devices themselves (Barnaghi et al., 2012). These small changes can ensure that the data
privacy of users is maintained when users rely on IoT devices. Another recommendation is
stricter compliance with GDPR in order to promote accountability and transparency in the
operations of companies. The objective of these laws is to limit the accessibility of
information by manufacturers as well as cyber criminals by ensuring that companies provide

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information regarding the type of data which they are collecting from users and the process
which is used to collect this data (Chaudhuri, 2016). The users should enjoy complete control
over this process, and they should prohibit the company from accessing the data anytime they
want. These legal guidelines will ensure that the IoT technology remains secured in the future
along with the private data of users from unauthorised access by cyber criminals (Chaudhuri,
2016). It will create a secured future in which companies will be obligated to prioritise the
security of users and maintain transparency in their operations which is crucial for the
development of this technology.
In conclusion, the popularity of IoT technology is becoming prominent, and it is a major
trend highlighted in the Telstra Security Report 2018. The report provided potential benefits
of this technology and how it is likely to change the world as we known it; however, various
potential negative implications of this technology is also highlighted in the report as well
which poses major threats to the privacy of individuals and companies that uses these
devices. Various legal provisions that govern this technology are also highlighted in this
essay which includes the Telecommunication Act, Privacy Act, Crimes Act and
Commonwealth Crimes Act. Many authorities provide legal frameworks and standards for
companies that manufacture these devices to ensure that the appropriate measures to protect
the privacy of users. The past, present and future implications of the popularity of IoT
technology shows that this technology has many security and privacy concerns which are
likely to affect millions of people. The future of this technology is promising, and the number
of IoT devices will grow substantially which shows that requirement of stricter legal
regulations to ensure that the privacy of users is not violated. Current legal practices did not
take into consideration various factors such as M2M communication, transmission of data,
accessibility of information and others. Recommendations are given in this essay which will
assist in address these threats and introducing stricter cyber security laws and regulations that
will protect the interest of users and ensure that this technology remains secured in the future.
These recommendations include compliance with GDPR, laws to increase transparency,
obligations on manufacturers and others.

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