Ahead of Black Friday and Cyber Monday, new study reveals day-to-day online bot attacks to cost online businesses $10 Billion globally in 2019
November 2019 by CHEQ
In the US alone $1.76 billion will be lost to ecommerce bot fraud by end of 2019
With new records for online spending expected to be set on Black Friday and Cyber Monday, a global economic study by CHEQ reveals that day-to-day bot attacks will cost online businesses $10 billion by the end of the year.
Cybersecurity company, CHEQ, commissioned a report about the annual economic impact of online bot attacks, undertaken with economist Roberto Cavazos, a professor at the University of Baltimore. The report focuses on bot attacks racking up daily economic damage through scraping content, false transactions, fake reviews and barraging ticketing sites.
The report finds that while global web sales are expected to reach $3.4 trillion in 2019, only 6% of these sales ($207.18 billion) are realistically at risk from bot attacks in 2019. Based on the current level of attacks and analysis of data on recent incidents, the report argues that 5% of this revised revenue at risk will be lost, creating $10 billion loss globally.
In the U.S. alone, of the $585 billion spent on online sales in the U.S this year, $1.76 billion will be lost to ecommerce bot attacks, the study finds.
The researchers also argue that the cost of economic damage could be much more significant if indirect economic costs are accounted for, which include loss in trust, falls in stock prices, damage to SEO, and the wider costs of mitigation and time lost by a business through attacks.
The report finds that despite the online economic boom expected on Black Friday and Cyber Monday —which last year saw $14 billion spent in online sales across both days—these gains will be nearly wiped out by the yearly global economic costs from such bot attacks.
The report reveals how relatively small attacks can add up to major economic loss for instance Ticketmaster claims that bots caused $5000 loss in a one-year period. Partypoker closed 277 bot accounts while redistributing $734,852 in funds to affected players, while small businesses such as The New Oxford Review faced a $25,000 deficit from an attack that created significant disruption to their business. During the festive season, low-level bots, aptly named “grinchbots,” also scrape millions of dollars’ worth of online tickets or buy out popular holiday gifts, only to resell them at a markup elsewhere.
The study excludes more costly and large-scale cybercrime — ad fraud, data breaches, ransomware, piracy, targeted government attacks, identity theft, malware and phishing.