Around 2,300 people died of heat-related causes across 12 European cities during the severe heatwave that ended last week, according to a rapid scientific analysis published on Wednesday.

The study targeted the 10 days, ending July 2, during which large parts of Western Europe were hit by extreme heat, with temperatures breaching 40 degrees Celsius (104°F) in Spain and wildfires breaking out in France.

Of the 2,300 people estimated to have died during this period, 1,500 deaths were linked to climate change, which made the heatwave more severe, according to the study conducted by scientists at Imperial College London and the London School of Hygiene and Tropical Medicine.

“Climate change has made it significantly hotter than it would have been, which in turn makes it a lot more dangerous,” said Dr Ben Clarke, a researcher at Imperial College London.

The study covered 12 cities including Barcelona, Madrid, London and Milan, where the researchers said climate change had increased heatwave temperatures by up to 4 degrees Celsius.

The researchers used established epidemiological models and historical mortality data to estimate the death toll, which reflects deaths where heat was the underlying reason for mortality, including if exposure exacerbated pre-existing health conditions.

The scientists said they used peer-reviewed methods to quickly produce the estimated death toll, because most heat-related deaths are not officially reported and some governments do not release this data.

Last month was the planet’s third-hottest June on record, behind the same month in 2024 and 2023, the EU’s Copernicus Climate Change Service said in a monthly bulletin on Wednesday.

Western Europe experienced its warmest June on record, with much of the region experiencing “very strong heat stress” – defined by conditions that feel like a temperature of 38 degrees Celsius or more, Copernicus said.

“In a warming world, heatwaves are likely to become more frequent, more intense and impact more people across Europe,” said Samantha Burgess, Copernicus’ strategic lead for climate.

Researchers from European health institutes reported in 2023 that as many as 61,000 people may have died in Europe’s sweltering heatwaves in 2022, according to new research, suggesting countries’ heat preparedness efforts are falling fatally short.

The build-up of greenhouse gas emissions in the atmosphere – which mostly come from the burning of fossil fuels – means the planet’s average temperature has increased over time. This increase in baseline temperatures means that when a heatwave comes, temperatures can surge to higher peaks.

Source: Reuters

–Agencie

Tens of thousands of women say they suffered painful and serious side-effects from Essure, a medical device meant as a permanent birth control option. The device is the subject of nearly 27,000 complaints to the FDA since its approval in 2002. Women reported excessive pain, severe allergic reactions and, in some cases, perforated organs.

Essure is FDA approved, but the agency recently restricted sales of the device to physicians who provide their patients with a checklist outlining the risks, reports CBS News correspondent Anna Werner. The FDA also gave the device a mandatory black box warning in 2016.

Bayer, the device’s manufacturer, admits there is no way to know who might develop problems. Women who have had problems told us the experience affected every aspect of their lives.

“The whole process was a very, very, very dark time for me,” Amanda Rusmisell said.

Even now, Rusmisell feels the pain from the choice she made 10 years ago. It started after Rusmisell and her husband decided two children were enough. Her doctor recommended Essure, a newer method of permanent birth control.

“‘You can go back to work the next day, it’s not invasive, it will be no problem at all,'” Rusmisell said she was told.

Essure is a medical device designed to prevent pregnancy permanently, without surgery. A doctor inserts two small flexible coils in a woman’s fallopian tubes where they’re supposed to build up scar tissue and block the tubes. Bayer said Essure has been used in over a million women worldwide and advertises it as “surgery free, hormone free and worry free.”

“It was the worst… pain I’ve ever been through,” Rusmisell said.

The pain continued, along with heavy periods so debilitating, she started to miss work. Her doctor told her it was likely just her age. Then when the symptoms persisted said she’d need a hysterectomy. She was 38.
 
“I didn’t have support of anyone who was dealing with this same things as me. And so it was very hard, and it was very — I felt like my body was failing me,” Rusmisell said.
  
It wasn’t until she found a Facebook group that she realized she wasn’t alone. Thousands of other women posted about problems they experienced including pain, severe bloating, rashes. Some posted images they say show the devices perforated a fallopian tube or their uterus.

Bayer declined to do an on-camera interview, but Dr. Edio Zampaglione, Bayer’s vice president of U.S. medical affairs, told us in a phone interview: “We take all of this very seriously.” He said the company’s studies show the product has “low and acceptable rates” of adverse events. And he said, “We do not see anything that would indicate that the risks of Essure outweigh the benefits.”

Illinois Dr. Brett Cassidy says at first he agreed, implanting Essure in 114 patients. But his opinion changed, he said, after a patient came back.

“She was having brain fog… migraines, joint pain in her knees arms wrists,” Cassidy said.

“Those seem like strange symptoms to even be linked with a device like this,” Werner said.

“My exact thoughts,” he said.

He eventually determined she needed a hysterectomy, which removed the Essure devices along with the uterus.

“And what happened to her symptoms?” Werner asked.

“Gone. Completely gone,” Cassidy said. “Within a week she was feeling 100 percent better.”

That was three years ago. Since then, Cassidy said he’s done over 100 hysterectomies for women with similar problems. He’s since concluded Essure can cause reactions in some women.
 
“The coils are made of nickel and polyester fibers. And when they’re placed in the tube, it creates an inflammation reaction… But this inflammation reaction continues in the body,” Cassidy said.

“So you’re basically saying that these two tiny little coils can make your whole body go haywire,” Werner said.

“Yeah, it’s hard to imagine or believe,” Cassidy said.

Bayer said hysterectomy is not the only option for Essure removal. Their executive said the reason for the complaints is “hard to say.” He told us “a lot of those symptoms can be hormonally-related and common as women go through reproductive life.”

But the explanations aren’t good enough for Rusmisell.
 
“We still want this product off the market… Everything we’ve done is because we have banged on people’s doors and we don’t go away,” Rusmisell said.

One way those women have had an impact is on Essure sales. The company confirmed to us that sales have dropped. We also spoke with a doctor who is a paid consultant for Bayer, Dr. Peter Rothschild. He told us he has implanted Essure devices in more than 1,100 patients with no reported problems.

The FDA has ordered Bayer to conduct a post-market trial to compare Essure side effects with those of tubal ligation. The final report date is 2023.

---

After our report, Steven Immergut, Bayer’s head of communications in pharmaceuticals, sent us an email in response. Among his points:

• “Essure has been tested in more than 200,000 women over about the last two decades and the conclusions of this scientific research show that its safety and efficacy are comparable to the only other form of permanent birth control, tubal ligation.”
• “Women should consult with their physician about any medical decisions involving Essure.”
• “Ms. Rusmisell has sued Bayer two times in cases involving Essure and has financial interests that are adverse to the company.”

AstroAI is recalling 249,100 minifridges on Wednesday over fire and burn hazards after two of the compact refrigerators caught fire, resulting in hundreds of thousands of dollars in property damage. 

The personal refrigerators’ electrical switch can short circuit, posing fire and burn risks, according to a notice from the Consumer Product Safety Commission (CPSC).

CPSC has received at least 70 reports of the minifridges emitting smoke, burning, melting or catching fire. Two fires caused more than $360,000 in property damages, the recall notice states.

Manufactured in China, the recalled 4-liter, 6-can capacity minifridges measure 9.45 inches in diameter, 6.9 inches wide and 10 inches tall. Available in black, white, blue and pink, the fridges were sold online for about $40 on Amazon.com and Astroai.com from June 2019 through June 2022. 

The recalled minifridges’ model number is LY0204A, which is printed on a label on the back of the product. Nine-digit serial numbers of the affected units starts with “S/N” and begin with either 19, 20, 21, 2201, 2202 or 2203.

Consumers with the recalled fridges are urged to immediately stop using them and to contact AstroAI by email at recall@astroai.com or through a dedicated page on the company’s website at  https://www.astroai.com/product-recall for a replacement product.

Disposal of the recalled minifridges should be in accordance with state and local waste disposal procedures, the CPSC states.

Megan Cerullo

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.

Pope Francis had a calm night with no more crises after suffering a bronchial crisis that prompted a sudden worsening of his health, the Vatican said in a short update on Saturday morning.

The pope woke up, had coffee and read newspapers, the Vatican said, and he continues to be able to move and sit in his armchair. 

Even so, the Vatican said in the update, he is not out of danger, and his prognosis is still guarded. 

On Friday, the pontiff experienced a “sudden worsening of the respiratory picture,” the Vatican said, when he had an “isolated crisis of bronchospasm,” which is when the muscles that line the airways in the lungs tighten.

The episode caused the 88-year-old pope to inhale vomit, the Vatican said in a statement. He was treated with noninvasive mechanical ventilation had a good response, the Vatican said.

“The Holy Father has always remained vigilant and oriented, collaborating in therapeutic maneuvers,” the Vatican said. “The prognosis therefore still remains reserved.”

This marks the fourth time the pope has been hospitalized since he took over leadership of the Roman Catholic Church in 2013.

He underwent significant abdominal surgery in 2021 and then had another procedure in 2023 to repair scar tissue and an abdominal hernia. He had been hospitalized briefly for treatment for pneumonia earlier that year.

Meanwhile, people have been gathering outside Rome’s Gemelli hospital to show their support, with many leaving messages and notes near a statue of former Pope John Paul II. Prayers have been coming from around the world.

Maria Ratai, a woman praying for the Pope in St. Peter’s Square, said “I pray every night for him, for his health because we need him not only we Italians but the world the world needs him because he’s a man of peace – and the world needs peace.”

Rev. Jacinto Bento, is a priest who was visiting Assisi on Saturday with a group of 30 Jubilee pilgrims from the Azores Islands.

“Every day we’re praying for the pope,” Bento said. “We’re very sad for his situation.”

A fire has reportedly broken out at a house in the Pothupitiya area of Wadduwa, resulting in the complete destruction of the property, according to police.

Local residents have collaborated to douse the flames and bring the fire under control and prevent it from spreading to a neighboring house.

Police confirmed that no casualties were recorded in the incident.

Police suspect that the fire has been triggered by an oil lamp, which was lit as part of a religious ritual and placed before a small Buddha’s statue inside the house. It is suspected that the woman in the house in question had left the lamp unattended, and it may have fallen over, sparking the blaze.

However, the exact cause of the fire has not yet been ascertained, while Wadduwa Police are conducting further investigations into the incident.

“You’re just traumatized when you have these losses. At some point, you’re just glad you’re alive,” said Don Hornstein, an insurance law expert at the University of North Carolina. “And then you have to turn to the business side of this. It’s tough.”

Helene was a Category 4 storm that first struck Florida’s Gulf Coast on September 26, dumped trillions of gallons of rain and left a trail of destruction for hundreds of miles across several states. At least 246 people have died in what is now the deadliest hurricane to hit the mainland U.S. since Katrina, according to statistics from the National Hurricane Center.

Two weeks later, Hurricane Milton swept across Florida, killing at least 11 people. The Category 3 storm destroyed coastal communities, tore apart homes, filled streets with mud and spawned a barrage of deadly tornadoes.

The combined private insured losses from the two hurricanes could reach $55 billion, according to risk management firm Moody’s RMS.

Immediately after disasters like these, property insurance is likely not top of mind as people secure their safety and basic needs, but insurance claims are part of the process of resetting. Many buy the policies in hope they can help protect them when disaster strikes. But oftentimes insurance doesn’t cover what the policy holder thinks it does — or thinks it should.

Rhoda Moehring, who turns 86 this month, says she doesn’t have a lot of faith that insurance companies will help her salvage the flooded rental homes she owns in the river town of Steinhatchee in Florida’s Big Bend.

“I usually get zip with these things,” Moehring said. ”‘Was I insured for that?’ ‘No, sorry, you weren’t.’ And it goes on and on. So I don’t put a whole lot of confidence in it.”

Moehring said she wasn’t sure about the details of her insurance policies and she’ll be relying on her son to help her navigate the claims process.

Here are some steps home and business owners should keep in mind when filing an insurance claim after a natural disaster.

Act fast, do the math

After the immediate emergency response, the first thing a homeowner or business owner should do is call their insurance agent or broker. The deadline to file a claim is generally about 60 days from the date of loss.

There are different types of policies that insure against damage. In the initial call, first focus on thoroughly understanding your policy, including coverage limits, deductibles and exclusions, so that you can do a rough calculation of what is covered and what deductibles are at play to decide if you should file a claim, experts said.

Many policies have payouts in complicated percentage formulas. For example, if your roof is damaged, your policy may spell out different deductibles depending on the roofing material, the age of the roof and even the wind speed from the damage event, and the percentage paid out may be based on the insured value versus the cost of replacement, said Amy Bach, executive director of the consumer advocacy group United Policyholders.

Homeowners should weigh their options, as a minor payout may not be worth the long-term ding on your claims history. That’s especially true if you don’t have flood insurance, as the average home insurance policy covers wind damage but generally doesn’t cover flood damage.

While Helene was primarily a flood event, there may be disputes over what is or isn’t “wind-driven rain” from Milton. Hornstein said the line between wind and water is a thin but very clear line that technical experts can determine. Should there be a proverbial tie, the law favors the insurance company.

“If the house was simultaneously destroyed by flood and, concurrently (by) wind, it’s not covered by private insurance,” Hornstein said.

Business owners should also check to see if they have business income or business interruption insurance, which covers the loss of income and other costs like expenses, salaries, or rent when a business is forced to close.

All in the documents

To file a claim, keep track of and document everything. Before and after photos and videos are ideal to jog your memory of what’s been lost and for proof to help bolster settlement claims. For business owners, keeping a record of costs that are incurred after the hurricane is important too.

“You may have evacuation costs, you may have business shut down interruption costs, you may have housing costs, you may have additional expenses that are unusual to your business,” said Steve Powell, executive vice president of property and catastrophe for claims management firm Sedgwick.

Once a claim is filed, the insurance company’s adjuster will come to survey the damage, typically within a few days if conditions allow. Be responsive to adjusters and make sure they see (and document) the damage that you see.

While it’s easy to get frustrated, adjusters are likely stressed too, said Lawrence White, an economics professor at the NYU Stern School of Business.

“To the maximum extent possible, try not come across as angry. Try to come across as reasonable,” White said.

If there’s disagreement or concern about the accuracy or fairness of the adjuster’s report from the insurance company, property owners can consider hiring a public adjuster for a second opinion. Their own adjuster can then lead the negotiations with the insurance company. First, however, owners should be aware of the fees the public adjuster charges and check their references.

“The insurance companies have totally the upper hand and when there’s a public adjuster, it does level the playing field a lot for the consumer having someone who speaks insurance and speaks damage,” Bach said.

Repair or lawyer up

Be aware of the deadlines for accepting a payment offer or filing an appeal with the insurance company.

Once you agree to an insurance payout, know that you can update the claim if more damage is discovered during the repairs though there may be deadlines for how long a homeowner has to reopen a claim.

If the back-and-forth with the insurance company drags on, you may consider hiring an attorney to reach a settlement as a last resort. A dispute that ends up in arbitration could stretch out for a year or more.

About 90% of all insurance claims are settled without escalating into a court fight, said Charles Nyce, a professor of risk management and insurance at Florida State University’s College of Business.

Other aid sources

For those with little or no insurance, there are government programs that can assist. The application process is similar to insurance claims: Contact the agency, determine eligibility and file an application.

The Federal Emergency Management Agency offers grants for home repair or replacement for applicants who meet certain conditions. The Department of Housing and Urban Development also offers certain grants that are available for hurricane survivors.

The Small Business Administration offers low-interest loans to renters, homeowners, business owners, and non-profits that suffered losses due to disasters. However, on Tuesday that program ran out of money until its coffers are replenished by Congress — which doesn’t reconvene until Nov. 12, after the election. The SBA said people should keep applying for loans, however.

For more details about these programs visit https://www.disasterassistance.gov.

Last week, the world faced what was likely the biggest IT failure in history.

When some people around the world logged onto their laptops on Friday, they were greeted with a blue error screen on their Microsoft Windows operating system.

But this was not a Microsoft issue. It was all to do with a U.S. cybersecurity firm called CrowdStrike which sent out a buggy software update that crashed Windows.

Industries across the board were hit, with airlines cancelling flights, broadcasters not able to go to air and shops not being able to open.

Businesses around the world use CrowdStrike’s software to protect their IT systems from hackers. The dependence on such a company exposed the fragility of global businesses’ reliance on a small number of IT vendors.

CrowdStrike rolled back the update but it took some time for companies to get back online.

For me, Friday was a professional day unlike any other.

In the latest episode of CNBC Tech’s “Beyond the Valley” podcast — which you can listen to above — Tom Chitty and I talk about what was behind the IT failure, how CNBC covered the event and whether something like this could happen again.

If you have any thoughts on this or previous episodes, please email us at beyondthevalley@cnbc.com.

You can subscribe to “Beyond the Valley” by clicking the links below to your chosen platform:

Apple Podcast

Google Podcasts

Spotify

Here is a transcript of the “Beyond the Valley” episode released on July 22, 2024. It has been edited for clarity and brevity. 

Tom Chitty 

Last week’s IT failure may go down as the worst in history. Computers around the world began to grind to a halt on Thursday night, after a faulty software update with a single defect saw severe disruption to air travel, hospitals, banks, and much more. This week, we’re going to explain how this happened and the subsequent fallout. We’ll also hear Arjun’s firsthand account of his day at CNBC’s London offices, and how CNBC managed to get on air. And finally, what does this failure tell us about the vulnerable foundations on which today’s economy is built? And how can we make it stronger? We had a quick chat on Friday, lunchtime last week, where you said, I think the words were, ‘I’ve never known a day like it.’ So just to give our listeners an idea of kind of, how did the day start?

Arjun Kharpal

As you mentioned, [it was] a day, unlike any I’ve ever experienced before in my career here as a journalist, and I was scheduled to talk about Netflix earnings. And what had happened was overnight, firstly, we had heard about issues with Microsoft’s cloud service. But before we were scheduled to go on air, people’s computers started to crash. And there were questions over whether we would get on to air or not. Anyways, it was all fine in the first hour of Squawk Box, our morning show and I spoke about Netflix, and after I come off air nearer to 7am London time, I noticed that my computer had crashed and others too. This was the first time mine had crashed, others’ had. But it wasn’t as widespread. Anyways, computers started then falling like dominoes at this point. And the blue screen of death, as it’s called, was appearing. But at this point, we didn’t really know what was causing it. And I was sort of frantically running around the office trying to figure out what had happened at this point.

Tom Chitty 

Because you’re in that unique position where you’re being affected by this problem. But you’ve also got to cover this problem as a journalist that covers tech. So you are the news.

Arjun Kharpal

How we broke this story, and we were actually one of the first in the world to break this story. And you’re going to talk about it. But it came from an update issued by a company called CrowdStrike, which we’re going to get into. But the way we found that out, interestingly, was the fact that because it was affecting us, our IT departments globally, had been speaking to CrowdStrike support. And, you know, we had got confirmation then from the company via our colleagues at NBC, that this was indeed the reason for this global IT meltdown. And you know, from that moment I think I ran a report on this news. On cnbc.com we got a headline out and the bare bones of information, which was, you know, very limited at the time we knew. And from then on, the story snowballed.

Tom Chitty 

We’re going to talk more about who CrowdStrike are, I think, you know, some people would probably never have heard of CrowdStrike. Do you have a stat of the week?

Arjun Kharpal

A billion dollars.

Tom Chitty 

Okay, great. Just really, you know, specific. That works for me. I can do with that. Weird to just do it on my own considering the last few episodes, I’ve been competing against someone far more intelligent than myself. So let’s see how I go. Okay, let’s let’s get into the bones of it. CrowdStrike. Who are CrowdStrike?

Arjun Kharpal

CrowdStrike are a U.S.-based cybersecurity company that sells cybersecurity software aimed at businesses.

Tom Chitty 

And their owner is a billionaire, George Kurtz, and the company is worth billions of dollars. So this isn’t just some small firm. This is a firm that supports the security of Microsoft.

Arjun Kharpal

And the security of organizations across the world. That’s the more important part of the equation, is that it’s not a small firm. Lots and lots and lots of global businesses rely on CrowdStrike for their security. And that’s why this whole episode was quite a big ordeal and why it was so widespread.

Tom Chitty 

There was also something that happened before the CrowdStrike thing, right, related to Microsoft Cloud.

Arjun Kharpal

So the timeline is quite important. I got into the office Friday morning, London time, overnight, our time so late U.S. Microsoft had issued an update saying that their Azure cloud services were facing some problems, and that there could be disruption to certain Microsoft cloud-based apps, you know, like Teams, for example.

Tom Chitty 

So is that what you were talking about when you had your first kind of update that you needed to do?

Arjun Kharpal

So that was the first thing. But what we found out later was that was completely wholly unrelated to what followed with CrowdStrike.

Tom Chitty 

That then probably confused countless IT managers, engineers, when this was happening, because they’re probably thinking, oh, it must be related to the update we did earlier, right?

Arjun Kharpal

Yeah, that’s right. There were questions over whether this was a Microsoft issue. I had first seen that and thought it was a Microsoft issue, the reason why Windows crashed on my PC. But then as we started to get more information, we found out it was to do with CrowdStrike. And their specific issue was this — CrowdStrike software called Falcon, this is what they call an endpoint monitoring product. So it’s effectively a piece of software designed to protect what they call endpoints. It’s a jargony term in the cybersecurity industry. It basically means your laptop, your PC, or smartphone.

What CrowdStrike did was, and this is normal for cybersecurity firms, is they have to issue updates very often because the cybersecurity landscape and the threats are constantly changing the different ways hackers might attempt to exploit vulnerabilities in machines, etc. So they have to update regularly, the patches and the defense against these kinds of new vectors of attack and therefore, a mundane update they issued, which was to roll out across their customers globally, is what they did.

If you’ve got a smartphone, your smartphone sometimes automatically updates overnight, right? Or it will automatically download apps. This is very similar to what happened.The fact that the company CrowdStrike has to constantly update its offering is also where the weakness stems from. And they issued an update that had buggy code in it, effectively defective code. This cybersecurity software are quite special. Because they’re trying to protect an organization’s entire infrastructure, they need deep access into the kernel, the core, the heart, effectively, of an organization’s IT infrastructure. By doing so, if things go wrong, it can take down a system. So they’ve issued this buggy piece of update, and that’s effectively crashed Windows.

So it wasn’t a Windows or Microsoft issue. It was a CrowdStrike issue. And as a result, people began to see the so-called Blue Screen of Death which popped up on their PCs and laptops. And you would have seen an unhappy face on those error messages as well.

Tom Chitty 

So were they updating on their own without you having to do click on the update? Was it just happening in the background?

Arjun Kharpal

Yeah, effectively. But it wouldn’t be something you know you as a PC user would have seen. You wouldn’t have to click update now or something like that. That would have been at the IT department level. What a morning it was here at CNBC, I’ve never experienced anything like it. There were questions over whether we would get to air.

Tom Chitty

Well, a U.K. broadcaster Sky News didn’t get to air, along with you know, countless others.

Arjun Kharpal

There were computers offline, you know, we were using our phones to get all of the information. So it was a crazy morning I was sat on set about 7:45, I think doing a hit, I can’t even remember what it was, we didn’t know a lot of information. So it was kind of like we had some reports, we had some information, this is what we know. But you know, and then all of a sudden, the producers at 7:45 a.m. said stay on set, don’t go anywhere. And from that moment, I did not leave that set for about three and a half, four hours. I was constantly on air. Update after update, minute after minute, as new things came through. We heard of airlines systems not working, huge delays at airports across the world, people not being able to check into flights, various different industries, banking industry, retail, all affected by this huge sort of wipe out of global IT. And even to the point where our first U.S. show Worldwide Exchange, you know, we were almost every five minutes popping up on that to give an update. And it was just it was crazy. And you know, the way the team’s handle it did here was incredible, globally, you know, our producers, it was just an extraordinary morning,

Tom Chitty 

I imagine the U.S. team were probably thinking or asking lots of questions about what’s been going on, or at least trying to rectify the situation that was happening with their systems.

Arjun Kharpal

We’d been online for several hours already. And so we had been following this story, you know, second by second. And so they were asking a lot of questions of us about what had happened, what had been said what had gone wrong. And so, you know, we were able to provide those kinds of updates, but it was a really extraordinary day.

Tom Chitty 

One question I have about the update, and I know you mentioned that they’re making lots of updates all the time to stay ahead of any bad malware. But wouldn’t they be testing this update before they go and send it out to eight and a half million Microsoft devices?

Arjun Kharpal

Testing, I’m sure had been done. I have no doubt about that. And so that’s the issue, where do you or how do you make that process more resilient? And these are all the questions, I think debates happening now about the fragility of global IT systems, and particularly, that update should have been robustly tested. And also, does it make sense to, you know, roll this out, globally in one go? Should you sort of phase it out? Iyou did a first phase of rollout, you would know, then if there was an issue.

Tom Chitty 

Like a pilot episode of a TV series to see what the reaction is. Is it positive?

Arjun Kharpal

Or has it crashed people’s computers? And that’s kind of what could have been done, I think.

Tom Chitty 

The fallout financially, I think, you know, hard to gauge exactly the cost, but [essentially] a multi billion dollar mistake. CrowdStrike, just to be clear, has admitted responsibility for the faulty software update. And I think the share price has sort of mirrored that in the sense that Microsoft hasn’t budged and CrowdStrike plummeted. And, yeah, I suppose the question then is, CrowdStrike [is] probably going to be the ones footing the bill, but that whole process could take years to fall out. And I know, there’s lots of air passengers that you know, aren’t going to get refunded or compensated for their missed flights or their canceled flights. So I don’t know. It’s just so pervasive, isn’t it in terms of how it’s affected so many industries.

Arjun Kharpal

Well, it’s something that most people traveling on an airline wouldn’t even sort of think about, oh, will my airline’s IT systems be okay? But that’s what’s happened. And also, I was walking past a retailer in London on Friday and they’d handwritten a note on their door saying, sorry, we’re closed because our IT systems don’t work. And that was just one case. You mentioned the airline passengers. And if they’re not getting refunds from their airlines, because of this issue, they’re unhappy. The airlines have probably even cost millions of dollars.

Tom Chitty 

Airlines are still having to cover costs of hotels, food, any additional costs that they might have, or whatever, as related to the canceled or delayed flight. It’s just that they’re not compensating the value. And this is U.K., this is the Civil Aviation Authority’s advice, but they’re not essentially giving them a whole lump of cash because it was out of their hands. It wasn’t their issue, they didn’t cause the issue, essentially.

Arjun Kharpal

You could imagine a lot of businesses as well who’ve lost money directly as a result of this issue, may even be thinking about legal action against CrowdStrike. There could be a ton of fallout for years to come from this on CrowdStrike, specifically, one from, you know, the stock price reaction to the reputational damage here and any kind of potential legal action. But is also legally a grey area. There’s regulation, for example, around companies in Europe, in the U.S., in the U.K., around how companies if they’re the victim of a data breach or a hack, they need to disclose that if it’s material enough to the regulators and to their customers. Obviously, this wasn’t [a] hack quite clearly. And this wasn’t a cybersecurity incident. So what do you do in this situation? That’s the big question.

Tom Chitty

Yeah, I mean, to [share] just a few other stats, two and a half thousand flights were canceled globally. And in the U.K., Friday was forecast to be the busiest day for departures since October 2019. Let’s talk a little bit about which countries weren’t affected necessarily, because there were some including China and Russia that weren’t. But I know you want to speak a little bit about China.

Arjun Kharpal

China is an interesting case. Because if you think about it, yes, Windows is actually used in China. But the issue again, wasn’t a Windows issue. It was CrowdStrike. Chinese companies are not using an American cybersecurity firm for their cybersecurity, clearly not, and so they wouldn’t have been affected by it. Others might have even been using a completely different operating system as well. But that’s why China wasn’t affected. I think it underscores the bifurcation of apps and operating systems and software that’s happening and we continue to see between the U.S. and China as well. But that’s why China wasn’t effective. What about Russia?

Tom Chitty

The irony is that, obviously, Russia avoided the chaos because Western sanctions mean that they don’t use software that’s owned by Western companies, such as Microsoft and CrowdStrike. So they’re becoming increasingly self-sufficient using companies such as Kaspersky, which is based in Moscow for their antivirus needs. So they avoided all of it. This wasn’t a hack or a cybersecurity breach, but it has been reported that hackers were trying to take advantage of what happened. What was going on there?

Arjun Kharpal

Yeah, it was quite, you know, rudimentary in many ways. It wasn’t like they were trying to exploit the technical vulnerabilities at all, it was more that they were trying to impersonate CrowdStrike support or Microsoft support saying, hey, you know, click this link and we’ll solve your IT issues. But they call it a phishing attempt. And so, you know, they often accompany with the link that’s malicious and effectively steal your data if you click it, so don’t do that.

Tom Chitty 

So I suppose we’ve talked about the costs, but lessons learned from what’s happened, are there any and what could be done? I know just that in April The Cyber Safety Review Board, which is part of the U.S. Homeland Security Department issued a pretty scathing report into Microsoft’s failed safety culture. This was off the back of a Chinese hack that affected U.K. and U.S. personnel following a summit that the two countries had. So there has been already some concerns around Microsoft safety and protocols. But this doesn’t feel like necessarily their issue.

Arjun Kharpal

I think the biggest lesson everyone has learned is how fragile the global IT system is, I think how much the concentration of power is in individual companies and their software, and how businesses rely on very few vendors. And that creates a huge amount of risk in the global system when it comes to IT.

Tom Chitty 

Should there be more regulation to break up, you know, what looks like a monopoly?

Arjun Kharpal

Well, that’s a whole other discussion. The issue here is that there are companies that are offering services. If you take a Microsoft, you take Amazon, they’re not just offering you one service, they’re offering you the cloud and Teams and everything else. And so, you know, that becomes attractive for businesses. There is that question about should, all these kind of offers and bundling of services be banned? But right now, for businesses, they’d rather say, well, I pay you one thing, and you sort out everything, it’s more convenient, right? So the question is, does this spur businesses at all to think about the way that their technology stack is built up and say, you know what, maybe we need a couple of different providers for this kind of cybersecurity. And actually the question is also how easy that is, it’s not easy, but I think it will spur a bit of thinking about how businesses rely on effectively one or two companies, if there’s a failure at any point that can bring down a whole organization, as we’ve seen.

Tom Chitty 

And also have plans in place to counter an outage from a third party, because it looks like, not enough planning was done to counter what essentially was a very small defect in the code that has brought the globe to a standstill in many respects.

Arjun Kharpal

One of the most interesting things over the last few years, and even now, there’s all this talk about the move to the cloud, right? The move to hosting your business and data, etc, on servers owned by Microsoft, Amazon, Google and others. But again, you are necessarily handing power over to those companies and control that if things go wrong, you might not have the ability to do backups, and control all of that data. So there’s also a vein of thinking that, right, whilst a lot of stuff does need to move to the cloud, and it gives you many advantages in terms of cost savings, and nimbleness and access to new AI applications, etc. You know, there’s a view now that perhaps, actually, businesses need to keep some of that data on premise, on servers in their office somewhere, or nearby. And that’s an interesting thought, because, you know, a few years ago, it was more, let’s just digitize everything and move it all, to the cloud. So, yeah, we’ll see if that trend plays out. And actually what kind of long lasting effect this has on companies like CrowdStrike. But the big question is, can IT departments figure out how to diversify a business’ IT supply chain effectively?

Tom Chitty

Final question. Will this happen again?

Arjun Kharpal

Probably, probably, because as long as this fragility exists, and there’s a lack of regulation, the atmosphere is ripe for something like this. The concentration of power remains in very few companies’ hands that run businesses. I’ll just read you a quote, actually, from the former chief executive of the UK National Cybersecurity Center, Professor Ciaran Martin, who basically said, this was to Sky News, he said: “The worst of this is over because the nature of this crisis was such that it went very badly wrong very quickly. It was spotted quite quickly. And essentially, it was turned off until governments in the industry get together and work out how to design out some of these flaws, I’m afraid we are likely to see more of these again. Within countries like the U.K. and elsewhere in Europe, you can try and build up that national resilience to cope with this. But ultimately, a lot of this is going to be determined in the U.S.”

Again, hinting at the fact that so many of these companies CrowdStrike, Amazon, Microsoft, Google are American firms. And so, yeah, the likelihood of this happening again is quite high.

Tom Chitty 

Sobering thoughts. But on that note, let’s, do stat of the week to lift everyone’s mood.

Arjun Kharpal

Billion dollars.

Tom Chitty

The value CrowdStrike lost since Friday.

Arjun Kharpal

No. It’s quite an obvious one. Shall I give you a second guess?

Tom Chitty 

The amount it’s expected to costs companies.

Arjun Kharpal

Yeah. It’s a very early estimate. And it’s probably likely more than this, but it’s the amount the economic impact, the amount it has cost businesses, this IT outage. That’s according to Patrick Anderson, the CEO of Anderson Economic Group, which is a Michigan research firm that specializes in estimating the economic costs of events like strikes, and other businesses disruptions and that stat has come via CNN.

Tom Chitty

Alright, that’s it for this week. Before we go, please follow and subscribe to the show. And you can leave us a review if you’d like. And thank you, Arjun.

Arjun Kharpal

Thank you, Tom.

Tom Chitty

We’ll be back next week for another episode of Beyond the Valley. Goodbye.