Sony’s Initial Decision to Give in to Terror Threats Has CEOs Up in Arms

The decision by Sony Pictures Entertainment to withdraw from release its buddy comedy movie, “The Interview,” over cybersecurity threats and hacking of company emails made public by a mysterious group calling itself the Guardians of Peace, has triggered much alarm by business leaders well beyond the entertainment industry.

At a recent New York gathering hosted by Yale’s CEO Institute, business leaders said that, while they fully appreciate Sony’s decision to withdraw the movie from release in theaters, they expressed dismay over Sony’s capitulating to threats. “I understand they are pressed by legal counsel to make the decision to withdraw the movie,” said one CEO, “but I am saddened that this represents a defeat for our first amendment rights to say what we want even if what we say is stupid.”

Such discussions tend to be conducted in a bloodless, high-minded environment. But when Sonnenfeld introduced the issue of cyber threats using the Sony Pictures incident, the tone quickly became heated with some CEOs interrupting others and many speakers manifesting alarm by what they see as a growing threat to business. Cybersecurity is no longer about losing customers’ credit card and social security numbers via a successful hack into a big-box retailer. One expert said that if the Pentagon has identified that 2,000 companies have been successfully hacked “that they know of,” how many companies have actually been penetrated that have not been discovered?

The FBI said evidence points to North Korea as the culprit behind a hacking of Sony Pictures that led the studio to pull the movie “The Interview” out of theaters. On Monday, Dec. 22, CNN released an interview with Sony CEO Michael Lynton in which he stated that it was the movie theaters that backed out, not Sony. Since then, Sony backpeddled and did release the movie on Christmas Day.

Addressing North Korea’s hack of Sony at his end-of-year news conference, which came out prior to the interview, President Obama said the movie studio erred in canceling the film. “We cannot have a society in which some dictator someplace can start imposing censorship here in the United States,” he said. Regarding North Korea, Obama said, “we will respond … in a place and time and manner that we choose.”

The Yale Summit, hosted by the Institute’s president, professor Jeffrey Sonnenfeld, is a bi-annual closed-door, off-the-record conference of leaders from finance, business, healthcare, technology and professional service companies.