Viruses cripple European SMBs

Bernhard Warner

LONDON: Internet viruses are overwhelming Europe's small business sector with 22 percent of these companies closing down operations to recover from recent attacks, according to a research report.

The worst hit countries were France and Italy where 50 percent and 30 percent of small businesses respectively were brought to a standstill by outbreaks, said McAfee Security, a division of U.S. software company Network Associates.

Network Associates defines small businesses as companies with under 20 employees. There are nearly 14 million such organizations across Western Europe, the company said.

The economic toll and frequency of attacks is crippling the firms, the company said. Each Internet virus attack costs the companies 5,000 euros ($6,090) in lost output and clean-up.

The annual cost of all cybercrime is 22 billion euros for Western Europe's small business sector, McAfee estimated.

"And it looks to be getting worse. This year, we've seen more virus outbreak alerts in the first quarter than in all of 2003," said Jack Clark, technology consultant for McAfee.

The study findings nearly match a recent survey by the UK's National Hi-Tech Crime Unit in which it estimated cybercrime cost British companies hundreds of millions, and perhaps billions, of pounds last year.

FROM BLACKMAIL TO SPAM

Elsewhere, the financial sector has been particularly hard hit by computer viruses. A relatively new crime known as "phishing" has surfaced where fraudsters send dubious e-mails or create spoof Web sites hoping to entice users to hand over banking details or passwords.

Also, online gambling sites have been hit by a wave of crippling data barrages, known as a distributed denial-of-service attacks. After taking the sites out of commission, the attacker demands money or the attacks will continue.

Police blame both crimes on organized criminal gangs.

Law enforcement authorities believe these groups have honed their skills in virus writing. Viruses have evolved over the years from being e-mail nuisances to more sinister programs capable of taking over a computer.

The effect is to turn ordinary PCs into spam machines. If a corporate network is hit, the intruding program can snoop for official documents and passwords, experts say.

McAfee said 20 percent of the Spanish small businesses in the survey, reported that files were irretrievably lost or damaged by digital security breaches.

Despite the virus barrage growing in intensity, a majority of small European businesses are not updating their anti-virus software. The UK leads the pack with just 39 percent of the small business sector fortifying their networks.

"Overall, the sector is suffering from a lack of awareness. Most companies are unaware viruses can spy on networks and change dial-in codes," said Clark.

McAfee surveyed 500 small businesses across six countries including the UK, France, Germany, The Netherlands, Spain and Italy.

© Reuters