Nokia Corporation (ADR) (NYSE:NOK) paid several million euros in blackmail to keep confidential the source code used for its phone’s operating system, Reuters and a Finnish TV station is reporting.
Six years ago the criminals had threatened to reveal the source code used in their smartphone’s operating system unless they received a cash payment. Reuters is reporting that the case is still open and those who took the cash payment remain unidentified.
Nokia contacts Finnish police after receiving blackmail request
According to the Finnish TV report, after they received the blackmail request, Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) contacted Finnish police, who ultimately staked out the drop. Nokia delivered the cash to a parking lot in Tampere, central Finland, with the police watching. The drop was successful, as the blackmailers took possession of the cash, but the police lost track of the culprits after the drop.
“We are investigating felony blackmail, with Nokia the injured party,” Detective Chief Inspector Tero Haapala told Reuters, but remained silent on further details.
Finnish television is reporting the blackmailers had acquired an encryption key for a critical component of the cell phone’s Symbian software, threatening to release it publically. If the software was publically released, hackers could create malware that would be virtually impossible to differentiate from the authentic software, the report noted. Such a crisis in software security could have seriously damaged a cell phone company at the time the ransom was paid.
Nokia’s smartphone market share
In 2007, near the time the caper was being hatched, Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) enjoyed nearly a 50 percent market share of the smartphone market using the Symbian software. This software was used by other manufacturers and thus a virus or malware in the Nokia’s operating system could have devastated its relationships with manufacturers, distributors and consumers.
Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) would later move to use Microsoft Corporation (NASDAQ:MSFT)’s Window’s software. Microsoft recently purchased purchasing Nokia’s entire mobile phone business and has incorporated their operating system into its growth strategy.
One can only wonder the impact a security breach that would lead to the Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) operating system code being made public might have on the future of the company. Had it garnered a reputation for lax security, it might not have been the apple in Microsoft Corporation (NASDAQ:MSFT)’s eye.