As you may have heard, the Chaos Computing Club (CCC) reverse engineered a Trojan written by the German government for the purpose of legal wiretapping.
Though the Trojan itself is legal in Germany (as long as it's only installed according to court orders), the CCC unveiled a few embarrassing facts about the Trojan.
The list of issues is long but can be summarized by one point - the Trojan developers didn't make any significant effort to prevent other parties from utilizing the Trojan for their own purposes.
One of the reasons security systems fail is because the designers of the system focused on a single adversary and didn't consider others. In this case it's likely that the designers of this Trojan were focused on ensuring that the Trojan's targets wouldn't identify and remove the Trojan. They didn't realize that their most formidable adversaries aren't the targets but members of the hacker community who are happy for an opportunity to embarrass the government.
More importantly, since the Trojan developers' goal was to "attack" their targets, they didn't realize that at the same time they were still obligated to prevent undue damage to them.
This isn't the first time a security system failed in such a way. Perhaps the most famous case is the Sony Copy Protection rootkit (Wikipedia), which some consider to have been, when revealed, the final nail in the coffin of copy protecting music CDs.
For a security system to succeed it must not cause undue damage. Anything but the tiniest amount of collateral damage is unacceptable and is likely to bring the downfall of the system.
Following the announcement from CCC several anti-virus developers have announced that due to the collateral damage they will be treating this Trojan as malware. The German government developers will need to come up with something new - perhaps they should ask the CCC for some tips.
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