Italy’s data protection authority, Garante, has ordered Chinese AI chatbot DeepSeek to halt its operations in the country. The decision comes after the company failed to provide clear answers about how it collects and handles user data. Authorities fear that the chatbot’s data practices could pose security risks, leading to its removal from Italian app stores.
Why Did Italy Ban DeepSeek?
The main reason behind the ban is DeepSeek’s lack of transparency regarding its data collection policies. Italian regulators reached out to the company with concerns over whether it was handling user information in a way that aligns with European privacy laws. However, DeepSeek’s response was deemed “totally insufficient,” raising even more doubts about its operations.
Garante stated that DeepSeek denied having a presence in Italy and claimed that European regulations did not apply to it. Despite this, authorities believe that the company’s AI assistant has been accessible to Italian users, making it subject to the region’s data protection rules. To address these concerns, Italy has launched an official investigation into DeepSeek’s activities.
Growing Concerns Over AI and Data Security
DeepSeek is an advanced AI chatbot developed by a Chinese startup, positioned as a competitor to OpenAI’s ChatGPT and Google’s Gemini. With over 10 million downloads worldwide, it is considered a strong contender in the AI market. However, its expansion into Western countries has sparked concerns about how user data might be used.
Italy is not the only country scrutinizing DeepSeek’s data practices. Authorities in France, South Korea, and Ireland have also launched investigations, highlighting global concerns about AI-driven data collection. Many governments fear that personal data gathered by AI chatbots could be misused for surveillance or other security threats.
This is not the first time Italy has taken action against an AI company. In 2023, Garante temporarily blocked OpenAI’s ChatGPT over privacy issues. OpenAI was later fined €15 million after being accused of using personal data to train its AI without proper consent.
Impact on the AI and Tech Industry
The crackdown on DeepSeek comes at a time when AI technology is shaping global markets. Just this week, concerns over China’s growing influence in AI led to a significant drop in the U.S. stock market. The NASDAQ 100 index lost $1 trillion in value, with AI chipmaker Nvidia alone suffering a $600 million loss.
While DeepSeek has been removed from Italian app stores, users who downloaded it before the ban can still access the chatbot. Additionally, its web-based version remains functional, raising questions about how regulators will enforce the restriction effectively.
As AI continues to make new advancements, countries are becoming more cautious about companies that fail to meet privacy and security standards. With multiple nations now investigating DeepSeek, its future in Western markets remains uncertain.
Cloud Europe is a Tier IV carrier-neutral data center based in Rome's Tecnopolo Tiburtino. According to the company's website, it specializes in data center architecture and management, focusing on security and service continuity. The company creates, hosts, and operates modular infrastructure for data centers in both the private and public sectors.
1. Cloud Europe: On June 29, 2024, RansomHub claimed responsibility for infiltrating the servers of Cloud Europe, a prominent Tier IV certified data center in Rome. The attackers allegedly encrypted the servers and exfiltrated 70 terabytes of data. Among the stolen information were 541.41 gigabytes of sensitive data, including client records, financial documents, and proprietary software.
2. Mangimi Fusco: The same day, RansomHub targeted Mangimi Fusco, an animal food manufacturer. The group claimed to have stolen 490 gigabytes of confidential data, including client files, budget details, and payroll information. However, as of now, Mangini Fusco’s website shows no signs of the reported attack, leaving room for skepticism.
3. Francesco Parisi: RansomHouse, another hacking collective, breached the website of Francesco Parisi, a group specializing in freight forwarding and shipping services. The attack occurred on May 29, 2024, and resulted in the theft of 150 gigabytes of company data. Francesco Parisi has acknowledged the breach and is working to restore normalcy while enhancing its cybersecurity defenses.
These attacks raise critical questions about the state of cybersecurity readiness among Italian businesses:
Vulnerabilities: Despite advancements in security protocols, organizations remain vulnerable to sophisticated attacks. The ability of threat actors to infiltrate well-established data centers and corporate websites highlights the need for continuous vigilance.
Data Privacy: The stolen data contains sensitive information that could be exploited for financial gain or used maliciously. Companies must prioritize data privacy and invest in robust encryption, access controls, and incident response plans.
Business Continuity: When ransomware strikes, business operations grind to a halt. Cloud Europe’s experience serves as a stark reminder that even data centers, designed to ensure continuity, are not immune. Organizations must have contingency plans to minimize disruptions.
To safeguard against ransomware and other cyber threats, companies should consider the following strategies:
Trento was the first local administration in Italy to be sanctioned by the GPDP watchdog for using data from AI tools. The city has been fined a sum of 50,000 euros (454,225). Trento has also been urged to take down the data gathered in the two European Union-sponsored projects.
The privacy watchdog, known to be one of the most proactive bodies deployed by the EU, for evaluating AI platform compliance with the bloc's data protection regulations temporarily outlawed ChatGPT, a well-known chatbot, in Italy. In 2021, the authority also reported about a facial recognition system tested under the Italian Interior Ministry, which did not meet the terms of privacy laws.
Concerns around personal data security and privacy rights have been brought up by the rapid advancements in AI across several businesses.
Following a thorough investigation of the Trento projects, the GPDP found “multiple violations of privacy regulations,” they noted in a statement, while also recognizing how the municipality acted in good faith.
Also, it mentioned that the data collected in the project needed to be sufficiently anonymous and that it was illicitly shared with third-party entities.
“The decision by the regulator highlights how the current legislation is totally insufficient to regulate the use of AI to analyse large amounts of data and improve city security,” it said in a statement.
Moreover, in its presidency of the Group of Seven (G7) major democracies, the government of Italy which is led by Prime Minister Giorgia Meloni has promised to highlight the AI revolution.
Legislators and governments in the European Union reached a temporary agreement in December to regulate ChatGPT and other AI systems, bringing the technology one step closer to regulations. One major source of contention concerns the application of AI to biometric surveillance.
In addition, Italian cybersecurity firm Cleafy researchers Federico Valentini and Alessandro Strino reported an ongoing financial fraud campaign since at least 2019 that leverages a new web-inject toolkit called drIBAN. The main goal of drIBAN fraud operations is to infect Windows workstations inside corporate environments, altering legitimate banking transfers performed by the victims and transferring money to an illegitimate bank account.
These accounts are either controlled by the threat actors or their affiliates, who are then tasked with laundering the stolen funds. The fraudulent transactions are often realized by means of a technique called Automated Transfer System (ATS) that's capable of bypassing anti-fraud systems put in place by banks and initiating unauthorized wire transfers from a victim's own computer.
The operators behind drIBAN have become more adept at avoiding detection and developing effective social engineering strategies, in addition to establishing a foothold for long periods in corporate bank networks. Furthermore, there are indications that the activity cluster overlaps with a 2018 campaign mounted by an actor tracked by Proofpoint as TA554 targeting users in Canada, Italy, and the U.K.
Organisations need to be aware of these threats and take immediate action to protect their systems from cyberattacks. The ACN has reported that dozens of Italian organisations have been likely affected by the global ransomware attack and many more have been warned to take action to avoid being locked out of their systems.