June 28, 2011

Sony CEO Defends Sony Actions In Hacking Scandal

Shareholders of Sony are calling for CEO Howard Stringer to step down after the Japanese tech giant suffered repeated data breaches over recent months. Sony claims it was targeted by hackers because it tried to protect its intellectual property. Reuters is reporting.

Hacker group LulzSec admitted to accessing the personal information of 77 million PlayStation Network and Qriocity accounts to highlight the lack of proper online security for its customers and for retaliation of its prosecution of those who would modify their game system consoles.

Programmer George Hotz, who went by the online name of Geohot, was sued by Sony for copyright infringement and circumventing PlayStation 3's protection schemes after he posted information on the internet that would enable gamers to run self-created applications on their consoles.

The company argued that the instructions made pirating games easier but announced on April 11 it had settled the charges against Hotz. About a week later, Sony's systems were hacked.

Stringer apologized for the data breach in April, which compromised personal data from more than 100 million online gaming and entertainment accounts, the Associated press (AP) reports. Sony was subsequently criticized for lax security and acting too slowly to inform customers as it assessed the amount of damage by one of the largest-ever security thefts.

Speaking at an annual shareholders meeting held in Tokyo, Stringer claims that as many as 90 percent of subscribers have come back since the Japanese company began restoring service last month. "Our brand perception, you'll be happy to know, is clearly improving again," he told a less-than-happy crowd.

Stringer did not respond when a shareholder asked him to step down to allow the company to make a fresh start. The 69-year-old Welsh-born former TV producer, said only that his foremost responsibility was to oversee the company's development and to nurture the next generation of management.

A proposed class-action lawsuit accuses Sony of laying off network security employees just two weeks before the hacking incident. Sony was also known to spend lavishly on security to protect its own corporate information while failing to do the same for its customers' data.

Sony estimates the security incidents will cost $173 million in increased customer support costs, freebie packages to welcome back customers, legal fees, lower sales and measures to strengthen security.


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