How Platforms Inadvertently Facilitate Fraud and Cybercrime

Introduction

Startup founders do not intentionally create cybercrime havens any more than hoteliers intentionally create drug hotels. Low entry barriers are a prerequisite for platform companies to reach critical mass and these low entry barriers sometimes have unintended consequences. The term cybercrime evokes images of a mysterious hacker wearing a hoodie at their computer conducting ransomware attacks. Few Amazon shoppers or Uber riders imagine that the most popular apps on their phones are tools for money laundering, extortion, human trafficking, identity theft, or financing terrorism. Lack of awareness is one of several challenges that platform operators and lawmakers must overcome to address the growing problem of online fraud and cybercrime. The void of literature and research examining how innocuous apps, innovation, digital payments, business policies, and geographic boundaries interact to fuel cybercrime contributes to the problem as well. Just as science is inclined toward reductionism, so too, to our detriment, has been the approach toward examining cybercrime (Wu et al., 2023). Despite billions in financial losses and the threat to public safety, the U.S. is ill-prepared to fight cybercrime according to a June 2023 report by the Government Accountability Office (US Government Accountability Office, 2023). The Better Cybercrime Metrics act, passed in May 2022, authorized $1M USD for the National Academy of Sciences to develop a taxonomy for the purpose of categorizing different types of cybercrime and cyber-enabled crime faced by individuals and businesses so that Federal agencies can begin to track, monitor, and report cybercrime under shared definitions and metrics (Better cybercrime metrics act, 2022). The dearth of consensus around what constitutes a cybercrime exerts significant influence on societal dynamics, legal and policy frameworks, law enforcement preparedness, and academic research [or lack thereof] (Phillips et al., 2022).

Take the following fictional illustration of how this lack of uniformity in definitions impacts society. Imagine that spaceships begin abducting hundreds of people in cities around the world. Some jurisdictions call it kidnapping, others increase their missing persons cases, some do not document the abductions because the investigation belongs to another jurisdiction, and several abductions go unreported by residents for fear that they will be ridiculed for reporting an alien abduction. Thus, the abductions continue for years with increasing frequency. Law enforcement agencies report crime rate reductions and reduce the size of their forces, not realizing that the reduced crime rates coincide with the size of the vanishing population. Little effort is put into developing expertise on alien abductions or developing technology to thwart or apprehend spaceships. After half of the human population has been abducted, government agencies realize they have a blind spot in reporting metrics and set out to create a common definition of ‘alien abduction’ to determine how prevalent the problem is. Meanwhile, it will take schools five years to develop curriculum that incorporates knowledge about alien abductions and it will take seven to ten years before comprehensive information about how to prevent or report alien abductions is available to residents and businesses. During this period, a multitude of citizens turn to farming corn and soy, crops made lucrative by government subsidies and tax breaks. Aliens now disguise their spaceships as birds and clouds to evade detection. Some aliens begin bribing residents to fly spaceships on their behalf and it will be another three years before researchers discover that most abductions happen on corn and soy fields. Now, governments are tasked with the perplexing challenge of reducing alien abductions without destroying entire economies, because their economies are reliant on the consumption and production of corn and soy and a large portion of the incomes used to purchase soy and corn come from the illicit bribes its residents accept in exchange for complicity with the abductions. Passing of the 2022 Better Cybercrimes Metrics Act is analogous to the government realizing they have a blind spot in this example. This chapter is analogous to the early literature documenting the alien abductions and the chain reaction of events described in this metaphor provide readers a logical framework to think through the repercussions and benefits of various solutions to combatting cybercrime.