Legal Liability for Insecure Software Might Work, but It's Dangerous

Imposing government-regulated security requirements on software companies may go too far and create unintended consequences.

Jeff Williams, CTO, Contrast Security

August 28, 2023

3 Min Read
Vault on a digital background
Source: Federico Caputo via Alamy Stock Photo

Ensuring security in the software market is undeniably crucial, but it is important to strike a balance that avoids excessive government regulation and the burdens associated with government-mandated legal responsibility, also called a liability regime. While there's no question the market is broken with regards to security, and intervention is necessary, there is a less intrusive approach that enables the market to find the right level of security while minimizing the need for heavy-handed government involvement.

Imposing a liability regime on software companies may go too far and create unintended consequences. The downsides of liability, such as increased costs, potential legal battles, and disincentives to innovation, can hinder the development of secure software without necessarily guaranteeing improved security outcomes. A liability regime could also burden smaller companies disproportionately and stifle the diversity and innovation present in the software industry.

Transparency, Not Legality

Instead, a more effective approach involves influencing the software market through measures that encourage transparency and informed decision-making. By requiring companies to be fully transparent about their security practices, consumers and businesses can make informed choices based on their risk preferences. Transparency allows the market to drive the demand for secure software, enabling companies with robust security measures to potentially gain a competitive edge.

By simply requiring companies to disclose what they do to ensure that their software is secure, the government can enable informed decision making without imposing strict regulations that are very likely to be a poor fit for all the different types of software in the world. This approach allows flexibility for companies to innovate and adapt their security practices based on evolving threats and technologies. Note that transparency involves minimal burden for companies as they don't have to change anything, just disclose what they're doing to secure their code. Of course, if they're too embarrassed to be transparent, there may be some work to bring their security program to an acceptable level. But that's exactly what we're after here.

Let the Market Decide

Crucially, this less intrusive approach encourages market-driven mechanisms to determine the right level of security. Informed consumers, armed with transparent information, can drive demand for secure software and incentivize companies to prioritize security as a competitive advantage.

I assume that the market will reward companies that excel in providing secure products and they will naturally thrive in the market, while those lagging behind will face market pressures to improve their security practices. The market may choose a different level of security than what I would like, but that's the point. The market can choose better than me and better than the government.

We have already seen that transparency can drive major changes in the software market. After decades of Draconian regulations, mandatory processes, OWASP Top Ten's, and all manner of secure coding requirements, we haven't made any progress. However, requiring software bills of materials (SBOMs) has already influenced the market to clean up their use of open source. SBOM is just a baby step towards true software security transparency, but it demonstrates the power of this approach.

Mandatory Transparency Achieves Security Without Excessive Burden

We all trust software with everything important in our lives. The companies creating this critical software aren't incentivized to do a great job at security. A liability regime goes too far and may have unintended negative consequences. But mandatory transparency can achieve the same outcome in the software market in a far less intrusive manner. This approach enables the market to find the right level of security while minimizing heavy regulation and fostering innovation.

By empowering consumers and encouraging market-driven mechanisms, we can achieve a more secure software ecosystem without imposing an excessive burden on development organizations.

About the Author(s)

Jeff Williams

CTO, Contrast Security

A pioneer in application security, Jeff Williams is the founder and CTO of Contrast Security, a revolutionary application security product that enhances software with the power to defend itself, check itself for vulnerabilities, and join a security command and control infrastructure. Jeff has over 25 years of security experience and served as the Global Chairman of the OWASP Foundation for eight years, where he created many open source standards, tools, libraries, and guidelines — including the OWASP Top Ten.

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