Chinese Spy Agency Behind Google Cyber Attack, Report Claims

In a blog post heard around the world, though muffled in China's state-controlled media, Google said on Tuesday that it and at least 20 other companies in the the Internet, finance, technology, media and chemical sectors had been targeted in a sophisticated cyber attack in December.

Due to this attack, which resulted in the theft of unspecified intellectual property, and a hostile business climate, Google said it would stop censoring Google.cn, a decision which could lead to the closure of the company's Chinese search service. Whether that happens will depend on how the Chinese government reacts.

U.S. Secretary of State Hillary Rodham Clinton on Tuesday expressed concern about Google's claims and asked the Chinese government for an explanation. She said she intended to give a speech next week "on the centrality of Internet freedom in the 21st century."

A report issued on Tuesday by iDefense, a computer security company owned by Verisign, states that 33 other companies were targeted in the attack. It also says that those responsible were working either directly on on behalf of official intelligence entities of the People's Republic of China.

"Two independent, anonymous iDefense sources in the defense contracting and intelligence consulting community confirmed that both the source IPs and drop server of the attack correspond to a single foreign entity consisting either of agents of the Chinese state or proxies thereof," the report says.

Eli Jellenc, head of international cyber intelligence at Verisign iDefense, stopped short of claiming that the attackers were formally employed by a Chinese intelligence agency.

"We can't determine whether the attackers themselves have 'intelligence agency' on their office door or are a paid proxy," he said.

Adobe on Tuesday said that it learned of "a sophisticated, coordinated attack against corporate network systems managed by Adobe and other companies" on January 2 and that it is investigating the incident. It said that it had no evidence that any sensitive information had been compromised.

Both Google and Adobe declined to provide further details about the attacks, stating that the incidents are still under investigation.

Internet Web hosting company Rackspace has confirmed that it was subject to attack, noting that no customer data was compromised or altered.

According to The Washington Post, Dow Chemical and Northrop Grumman may also have been targets of the attacks.

Other targets of the attack have yet to be publicly identified.

George Kurtz, CTO of McAfee, said in a blog post that his company is participating in the investigation and that the intellectual property stolen from Google was likely source code. Citing a study conducted by his company, he said that businesses lose more than $1 trillion in intellectual property annually due to data theft and cybercrime,

In a blog post on Wednesday, Mikko Hypponen, chief research officer at Finnish security company F-Secure, said he believes "the attack was launched via a convincing e-mail with an exploit-ridden PDF attachment."

The iDefense report says that the December attack on Google and other companies has similarities to a July attack on about 100 companies in the IT sector. That attack used a malicious PDF file to exploit a zero-day vulnerability in Adobe Reader.

"According to sources familiar with the present attack, attackers delivered malicious code used against Google and others using PDFs as e-mail attachments; those same sources also claim that the files have similar characteristics to those distributed during the July attacks," the report states. "In both attacks, the malicious files drop a backdoor Trojan in the form of a Windows DLL."

The report suggests the July and December attacks may be the same attack, meaning that affected companies may have been compromised for months.

In reference to the December attack, an Adobe spokesperson said, "At this time, we have no evidence to suggest that a vulnerability in Adobe Reader was an attack vector in this incident."

Adobe on Tuesday happened to issue a security patch for a vulnerability in its Acrobat and Reader software that had been actively exploited for at least a month.

Alan Paller, director of research at the SANS Institute, said it is likely that the attack was a highly targeted spear-phishing attack that exploited a zero-day vulnerability in the software used by employees at targeted companies.

"It doesn't really matter if the attack targeted Word or Adobe or a video player," said Chris Wysopal, CTO of Veracode. "What's clear is that the set of software on the user's system really isn't being scrutinized and managed the way a machine connected to the Internet, like a Web server or gateway, is."

That's something that needs to change, Wysopal insists.