Crackdown targets cyber black market

An estimated 560,000 people were engaged in the industry in first six months of the year

China has experienced an increase in cases of online data leaks in the past few years due to the development of the "cyber black market", according to a report by the Shanghai Academy of Social Sciences' Institute of Information.

The Annual Report on Development of Cyberspace Security in China, which the institute released on Monday, says that cases relating to information leaks have become more frequent since last year, such as the high-profile case involving Gfan - the country's largest online platform for Android systems - in which data of the platform's more than 23 million users, including their names, passwords and email addresses, were published on the internet.

It said that economic losses from June last year to June this year resulting from text message spam, online scams and information leaks totaled 91.5 billion yuan ($13.3 billion).

Such losses were attributed to the cyber black market, a commercial chain where participants such as hackers and network operators gain profits illegally, it said, adding that the industry is a growing multi-billion-US dollar economy.

"In the past, hackers conducted cyberattacks for fun, or to show off their hacking skills, but now they operate as businesses, gaining money through utilizing their techniques, such as stealing personal information and selling it," said Zhang Huaping, an associate professor specializing in cybersecurity at Beijing Institute of Technology.

"Cybersecurity issues used to relate to the actions of individuals, but in recent years, hackers have started making deals with network businessmen, earning a percentage of the profits," Zhang said.

On Thursday, a report on cybersecurity by Chinese internet giant Tencent said that online social platforms with an abundance of personal information have become the most popular space for those working on the cyber black market to gain illicit profits.

It estimated that at least 560,000 people engaged in the industry in the first six months this year, involving more than 148.2 billion yuan.

Qihoo 360, China's largest security software provider, said in November last year that at least 1.6 million people are engaged in the cyber fraud, with their annual output value surpassing 110 billion yuan.

Pei Zhiyong, a cybersecurity specialist at Qihoo 360, said: "A simple fraud operation needs a team of at least 10 people, while a fraud chain has more than 15 links. The work of each participant is clear. Some take charge of sending text message scams, while others are responsible for designing fraud programs, for example."

Experts said sometimes such fraud results is more than just financial losses.

In August, Xu Yuyu, an 18-year-old from Linyi, Shandong province, died of a heart attack after losing 9,900 yuan ($1,500) in a phone scam. The money had been saved to cover her college tuition fees.

Peng Yang, a professor specializing in big data and information security at Beijing University of Posts and Telecommunications, said that the cyber black market has disturbed normal market order as well as network competition.

"The fight against the cyber black market is not hard, as we can trace how data is released online," Peng said. "The problem is that there are no laws defining the industry as illegal."

Experts said the most effective way of addressing the problem is to pass legislation on protecting information and clarify governmental departments' obligations on law enforcement and supervision.