(Reuters) – Spanish police arrested three suspected members of the so-called “Anonymous” group on Friday on charges of cyber attacks against targets including Sony’s PlayStation store, governments, businesses and banks.

The police said the accused, arrested in Almeria, Barcelona and Alicante, were guilty of coordinated computer attacks from a server set up in a house in Gijon in the north of Spain.

Spanish police alleged the three arrested “hacktivists” had been involved in cyber attacks on Spanish banks BBVA and Bankia and the Italian energy group Enel as well as Sony PlayStation stores.

Members of the loosely coordinated “Anonymous” group, known for wearing Guy Fawkes masks made popular by the graphic novel “V for Vendetta,” had also attacked government sites in Egypt, Algeria, Libya, Iran, Chile, Colombia and New Zealand, police said.

“They are structured in independent cells and make thousands of simultaneous attacks using infected ‘zombie’ computers worldwide. This is why NATO considers them a threat to the military alliance,” the police said in a statement.

“They are even capable of collapsing a country’s administrative structure.”

The arrests are the first in Spain against members of the “Anonymous” group following similar legal proceedings in the United States and Britain.

The police did not rule out further arrests.

(Game Politics) – A new report claims that around 99.7 percent of phones using Google’s mobile operating system contain a security hole that can enable hackers to send unencrypted personal data. Mobile devices using the Android operating systems have a weakness that could allow hackers to gain “full access” to private information such as calendar, contact information, and “private web albums,??? according to a research group from Germany’s University of Ulm. The security hole could also give hackers the ability to view, modify or delete contacts, calendar events, and private pictures. Thankfully, the security flaw only affects individual phones.

In a new research paper, researchers at the University of Ulm detailed the flaw, testing it for vulnerabilities. They found that some Android applications could transmit unencrypted data, allowing others to “eavesdrop” any of the transmitted information. Researchers were tested to see if they could hack into Android data using a simple third-party application. Apparently they found a lot of success in completing the exercise.

“We wanted to know if it is really possible to launch an impersonation attack against Google services and started our own analysis,??? researchers said. “The short answer is: Yes, it is possible, and it is quite easy to do so.???

The hack was tested on various versions of the Android operating system including 2.1, 2.2, 2.2.1, 2.3.3, 2.3.4 and 3.0. Phones used in the test included the Nexus One, HTC Desire, HTC Incredible S, and newly released tablet the Motorola XOOM.

(Reuters) – Sony Chief Executive Officer Howard Stringer apologised to users of its PlayStation Network and other online services, breaking his silence on the biggest Internet security break-in ever.

Stringer’s comments, which did not specify when services would resume, come after criticism of his leadership since Sony revealed hackers had compromised the data of more than 100 million accounts used for accessing games and music over the Internet.

“As a company we, and I, apologize for the inconvenience and concern caused by this attack,” Stringer said on Sony’s U.S. PlayStation blog late on Thursday.

The incident may prove to be a significant setback for a company looking to recover after being outmanoeuvred by Apple in portable music and Samsung Electronics in flat-screen TVs and which faces a tough fight in video games with Nintendo and Microsoft.

One analyst said security concerns could weigh on sales of Sony’s gadgets and hurt growth prospects for its network services.

“There is a real concern that trust in Sony’s business will decline,” Kota Ezawa, analyst at Citigroup Global Markets Japan, wrote in a note ahead of the comments from Stringer.

“The network business itself still only makes a small direct contribution to earnings, but we see a potential drop in hardware sales as a concern.”

[Full article at Reuters.com]

(Ubergizmo) – Famed iPhone hacker turned PlayStation 3 hacker George Hotz a.k.a Geohot, has reportedly fled to South America from his New Jersey home in an attempt to escape Sony in their ongoing court battle over hacking the video game console.

According to VGHQ, Hotz has not been complying with Sony’s requests to hand over hardware related to his PS3 hacking. Devices such as his computer hard drives were supposed to be forked over to Sony for inspection untouched, with all potential hacking tools in tact. In Sony’s defense, it wanted to search for any names and contacts of any co-hackers that worked with Hotz to break the system’s security and allow unsigned code to run on the machine.

Since then, Sony has apparently learned that Hotz had deleted “integral components??? from his hard drives and that the hacker lied to the Court about not having a PlayStation Network account.

[Full article at Ubergizmo.com]

(Gamespot) – Recently, hackers proclaimed victory over the PlayStation 3′s security measures, releasing security keys allowing people to run unauthorized software on their consoles, including pirated games, homebrew programs, and even custom firmware. Sony Computer Entertainment America fired back yesterday, filing suit in US District Court against original iPhone jailbreaker George Hotz and multiple members of a hacking collective called fail0verflow.

The suit seeks injunctive relief and damages, accusing the hackers of breach of contract, tortuous interference with contractual relations, trespassing, common law misappropriation, and violating the Digital Millennium Copyright Act, the Computer Fraud and Abuse Act, the Copyright Act, and the California Comprehensive Computer Data Access and Fraud Act.

Additionally, Sony characterizes the hackers’ efforts as a conspiracy because they worked together to circumvent the PS3 security measures and encouraged others to build on those actions. As a result, Sony wants each of the defendants held liable for all acts committed in furtherance of the conspiracy by the other members.

“Unless this court enjoins defendants’ unlawful conduct, hackers will succeed in their attempts to ensure that pirated software can be run on the PS3 system, resulting in the destruction of SCEA’s business,” the suit states.

Sony is also seeking a temporary restraining order preventing the defendants from circumventing the PS3 security or assisting others in that act, as well as an evidentiary preservation order requiring them to preserve all hardware and files related to their hacking efforts. Those requests have not yet been ruled on by a judge.

[Full article at Gamespot.com]

(Kotaku.com) – As leaked copies of Halo: Reach hit the torrent sites, Microsoft tells Kotaku that they are aggressively investigating the leak and are fully prepared to hand out bans to anyone caught playing the game pre-release.

It happens every time a big game comes out, but when it’s a game as big as Bungie’s final Halo title, Microsoft sits up and takes notice. Released on the internet far in advance of its September 14 street date, a Microsoft representative tells Kotaku that the source of the leak is under investigation.

“We are aware that an unauthorized copy of “Halo: Reach” has leaked. We are aggressively investigating the matter. We have no further details to share at this time.”

So where does that leave folks who can’t resist the lure of early Halo: Reach? Even if you have every intention of picking up a retail copy, we’d suggest you wait, lest Microsoft come after you.

“We are aggressively pursuing the violators. Microsoft’s commitment to combat piracy and support safer and more secure gameplay for the 25 million members of the Xbox LIVE community remains a top priority. All consumers should know that piracy is illegal and modifying their Xbox 360 console violates the Xbox LIVE terms of use, will void their warranty and result in a ban from Xbox LIVE.”

(CNN) – When Dan Brown’s blockbuster novel “The Lost Symbol” hit stores in September, it may have offered a peek at the future of bookselling.

On Amazon.com, the book sold more digital copies for the Kindle e-reader in its first few days than hardback editions. This was seen as something of a paradigm shift in the publishing industry, but it also may have come at a cost.

Less than 24 hours after its release, pirated digital copies of the novel were found on file-sharing sites such as Rapidshare and BitTorrent. Within days, it had been downloaded for free more than 100,000 times.

Digital piracy, long confined to music and movies, is spreading to books. And as electronic reading devices such as Amazon’s Kindle, the Sony Reader, Barnes & Noble’s Nook, smartphones and Apple’s much-anticipated “tablet” boost demand for e-books, experts say the problem may only get worse.

“It’s fair to say that piracy of e-books is exploding,” said Albert Greco, an industry expert and professor of marketing at Fordham University.

Sales for digital books in the second quarter of 2009 totaled almost $37 million. That’s more than three times the total for the same three months in 2008, according to the Association of American Publishers (AAP).

Statistics are hard to come by, and many publishers are reluctant to discuss the subject for fear of encouraging more illegal downloads. But digital theft may pose a big headache in 2010 for the slumping publishing industry, which relies increasingly on electronic reading devices and e-books to stimulate sales.

“Piracy is a serious issue for publishers,” said Hachette Book Group in a statement. The company that publishes Stephenie Meyer’s wildly popular “Twilight” teen-vampire series says it “considers copyright protection to be of paramount importance.”

[Full story at CNN.com]

STOCKHOLM (Reuters) – Four men behind The Pirate Bay, one of the world’s biggest free file-sharing websites, were each sentenced to a year in jail on Friday for breaching copyright, and ordered to pay $3.6 million in compensation.

Analysts said the guilty verdict in the closely-watched test case could help music and film companies recoup millions of dollars in lost revenues, though they doubted it would stem the tide of illegal downloading.

In a broadcast on The Pirate Bay’s website one of the four defendants, Peter Sunde, taunted the court, holding up a mock IOU note for 31 million Swedish crowns ($3.6 million) followed by the initials “JK” — Internet lingo for “just kidding.”

“That’s the closest they’re going to get to getting money from me,” Sunde said.

International trade body IFPI, which represents some 1,400 record companies across the world, reported earlier this year that about 95 percent of music downloaded in 2008 was illegal.

On its website, The Pirate Bay scorned the ruling, calling it a “crazy verdict.”

“It was lol (laugh out loud) to read and hear,” the message read. “But as in all good movies, the heroes lose in the beginning but have an epic victory in the end anyhow. That’s the only thing Hollywood has ever taught us.”

IFPI Chairman John Kennedy welcomed the court sentence which he said in a statement provided a “a strong deterrent” against copyright infringement.

“This is good news for everyone, in Sweden and internationally, who is making a living or a business from creative activity and who needs to know their rights will protected by law,” he said.

The men linked to The Pirate Bay — Sunde, Gottfrid Svartholm Warg, Fredrik Neij and Carl Lundstrom — were charged early last year by a Swedish prosecutor with conspiracy to break copyright law and related offences. They denied the charges.

Companies including Warner Bros., MGM, Columbia Pictures, 20th Century Fox Films, Sony BMG, Universal and EMI also sought damages of more than 100 million crowns ($12 million) to cover lost revenues.

The Stockholm district court said in a statement the four were found guilty of breaching copyright laws and each sentenced to a year in prison.

PARIS (Reuters) – France’s parliament rejected a bill on Thursday that proposed disconnecting Internet users if they download music or films illegally, with the ruling UMP party failing to turn out in force to approve the law.

Backed by President Nicolas Sarkozy’s government, the legislation was meant to quell the flow of free songs and films on the Internet that has hurt the revenues of artists and production companies.

However, opposition politicians managed to defeat it at a final vote in the National Assembly on Thursday when only a small number of UMP lawmakers turned up for the session, handing the center-right government an embarrassing defeat.

Sarkozy said he was determined to see the law passed and accused the opposition of parliamentary maneuvering.

“Nicolas Sarkozy does not intend to give up on it, whatever the derisory maneuvers that only serve to harm creative diversity,” his office said in a statement.

Socialist parliamentarians broke out in applause after the vote went their way. The government said it plans to re-submit the bill later in April.

“(The law) will only be delayed by a few weeks,” said Roger Karoutchi, the minister in charge of relations with parliament.

UMP party discipline has been severely tested this year, from a controversy over France’s return to the military command structure of NATO, to a bill to ease restrictions on Sunday business hours — which was postponed indefinitely.

The Internet bill, which is heavily supported by the music industry, would give users caught illegally downloading files two warnings and then, after a third violation, have them disconnected from the Internet for up to a year.

Socialist parliamentarian Patrick Bloche called the bill “dangerous, useless, inefficient, and very risky for us citizens.” Others urged the government not to re-submit it.

Under pressure from a struggling music industry, governments have long been trying to crack down on online file-swapping.

“The proposed law is an effective and proportionate way of tackling online copyright infringement and migrating users to the wide variety of legal music services in France,” said John Kennedy, chairman and chief executive of IFPI, a music industry group.

Some consumer groups have said that the proposed law could hit the wrong people, and that honest users risked being unfairly punished and forced to prove their innocence if hackers hijacked their computers’ identity.

Others worried it would pit artists against their audience.

The music industry has been lobbying for similar laws to be introduced around the world. In January, Irish Internet provider Eircom agreed to disconnect users who download music illegally in a settlement with four major record companies.