Stringer under fire after second security breach at Sony

By Time of article published May 4, 2011

Share this article:

Sony chief executive Howard Stringer faced harsh criticism of his leadership after the consumer electronics conglomerate revealed hackers might have stolen the data of another 25 million accounts in a second massive security breach.

Sony’s latest revelation came just a day after it announced measures to avert another cyberattack like that which hit its PlayStation network two weeks ago.

The Japanese electronics company said its Sony Online Entertainment PC games network had been hacked on April 18, but did not find out about the breach until the early hours of Monday and shut down the service.

The breach may also have led to the theft of 10 700 direct debit records from customers in Austria, Germany, the Netherlands and Spain, and 12 700 non-US credit or debit card numbers, it said.

Investors said Sony and Stringer had botched the data security crisis, a further blow for the company which has struggled to match recent hit products from rivals including Nintendo, Samsung and Apple.

“The way Sony handled the whole thing shows that it lacks the ability to manage crises,” said Michael On, a fund manager at Beyond Asset Management in Taipei.

“The current chief executive should step down after the hacker problems and the company’s failure to push out products that are competitive.”

Welsh-born Stringer, a former TV producer who was knighted in 2000, has not commented on the security breach, leaving Kazuo Hirai to lead the news conference and apology on Sunday.

Hirai headed the networks division and was seen as the likely successor to Stringer, who in March committed to stay in his role for the current year at least.

Hirai might not escape the fiasco unscathed, said another fund manager, who sold Sony shares last year and was not authorised to talk publicly.

“The leadership of Sony is not in a good place right now, which could lead to Stringer stepping down and may sabotage Hirai’s chances of succeeding as the chief executive,” said the fund manager.

The attack Sony disclosed on Monday took place a day before a massive break-in of its separate PlayStation video game network that led to the theft of data from 77 million user accounts. Sony revealed that attack last week.

The PlayStation network lets video game console owners download games and play against friends. The Sony Online Entertainment network, the victim of the latest break-in, hosts games such as EverQuest played over the internet on PCs.

Sony said late on Monday that names, addresses, e-mails, birthdates, phone numbers and other information from 24.6 million PC games accounts might have been stolen from its servers as well as an “outdated database” from 2007.

Asked whether other data could be at risk, Sony spokeswoman Sue Tanaka listed the precautions the company had taken such as firewalls, but added it could not be certain. “They are hackers. We don’t know where they’re going to attack next,” Tanaka said.

Sony is trying to repair its tarnished image and reassure customers who might be pondering a shift to Microsoft’s Xbox. The PlayStation network incident has also sparked legal action and investigations by authorities in North America and Europe, home to almost 90 percent of the users of the network.

On Monday, Sony declined to testify in person in front of a US congressional hearing, but agreed to respond to questions on how consumer private data is protected by businesses in a letter yesterday, said a spokesman for Mary Bono Mack, a Republican congresswoman from California, who is leading the hearing.

The incident that Sony disclosed on Monday also forced it to suspend its Sony Online Entertainment games on Facebook. Sony posted a message on Facebook saying it had to take down the games during the night. – Reuters

Share this article: