The Free Market in Action

A short while back DigiNotar, a Dutch certificate authority, was hacked and their signing certificates were stolen. This lead to incidents where hackers were able to create certificates for any website they chose and those certificates would appear to be valid to every major web browser. For instance a phiser could create a site and the web browser would see the certificate and say it was valid as it was signed by DigiNotar, a trusted certificate authority.

DigiNotar’s business is literally trust so their reputation is everything. Unless people can trust that websites whose certificates were signed by DigiNotar are who they claim to be DigiNotar has no business. Well people can no longer trust certificates signed by DigiNotar and now they’re filing for bankruptcy:

DigiNotar, the Dutch certificate authority (CA) which was recently at the centre of a significant hacking case, has been declared bankrupt.

This is the free market in action. People trusted DigiNotar and DigiNotar failed to uphold that trust so people are no longer willing to do business with that company. As one of the entities DigiNotar’s failure negatively affected was the Dutch government it’s unlikely the company will receive any kind of bailout or otherwise be artificially propped up meaning this is a rare case where we get to see how the free market actually works.