The Hidden Cyber Risk Behind “Local” Online Businesses

n alleged online jewellery retailer marketed itself as a long-established Maltese atelier, targeting local consumers through a professionally designed website and emotionally driven messaging announcing a supposed business closure.

Despite strong localisation cues, the operation had no genuine commercial presence in Malta. Products were shipped from outside the EU, and key information regarding trader identity, jurisdiction, and supply chain was obscured or minimised.

The case highlights how false digital identities can be constructed and monetised rapidly, exploiting consumer trust and regulatory blind spots in cross-border e-commerce.

From a cybersecurity law perspective, the risk in this case did not stem from technical failure. It stemmed from:

• The unverified use of “local” branding and geographic claims
• The absence of effective controls over digital representations
• Manipulative interface design and urgency-based messaging
• Fragmented responsibility across platforms, intermediaries, and jurisdictions

This illustrates a critical shift: cybersecurity risk increasingly arises at the human and legal layer, where perception, trust, and representation can be weaponised.

Most cybersecurity frameworks focus on preventing unauthorised access to systems and data. This case shows how harm can occur even when:

• Systems remain secure
• No data breach takes place
• No malware is deployed

For businesses, this creates a false sense of security. Digital exposure is not limited to technical infrastructure – it extends to how an organisation appears, represents itself, and is replicated online.

For businesses, this creates a false sense of security. Digital exposure is not limited to technical infrastructure – it extends to how an organisation appears, represents itself, and is replicated online. As demonstrated in this case, significant damage can be inflicted without ever compromising the technical integrity of an organisation’s systems. The risk emerges from the way a business is perceived and presented in digital environments.

The replication and manipulation of an organisation’s digital identity—through fake websites, social media accounts, or fraudulent marketplaces—can undermine consumer trust and circumvent regulatory oversight. The harm here is reputational and legal rather than technical, yet its impact can be just as severe as a conventional cyberattack. It highlights the need for businesses to broaden their understanding of cyber risk to include the management and monitoring of their digital footprint, online brand presence, and the authenticity of their digital representations across platforms and jurisdictions.

Cases like this raise difficult questions for businesses and decision-makers:

• When does misleading digital presence become a cybersecurity incident?
• Who bears responsibility when deception occurs through platforms or intermediaries?
• How should boards and management assess non-technical cyber risk?
• What legal remedies exist when enforcement spans multiple jurisdictions?

These questions cannot be answered by IT teams alone. They require legal, regulatory, and governance expertise aligned with modern cyber risk.

• Cyber risk does not require a hack – trust manipulation is enough. Manipulating trust—by creating fraudulent websites, social media profiles, or marketplaces—can cause significant harm without breaching systems.  
• Digital identity and online representation are now legal risk vectors. Managing digital identity is no longer just a technical issue but a legal one, requiring oversight of brand representation and authenticity across platforms and jurisdictions.
• Consumer-facing businesses are particularly exposed to cyber-enabled deception. Fraudulent websites or impersonation schemes can mislead consumers, damage brand reputation, and trigger legal liabilities
• Platform reliance does not eliminate legal responsibility. If deception occurs via intermediaries or platforms, organisations may still face regulatory scrutiny and legal claims. Effective governance must ensure oversight of all digital channels, not just those directly controlled by the business.
• Cybersecurity governance must extend beyond technical controls. Boards and management should assess non-technical risks, such as trust manipulation and digital identity threats, and implement frameworks to monitor and respond to reputational and legal challenges.

Our cybersecurity and digital law practice focuses on the legal dimensions of cyber risk that sit outside traditional breach scenarios. We advise businesses, platforms, and boards on:

• Cyber-enabled fraud and digital impersonation risks
• Legal accountability for online branding and representations
• Governance frameworks for managing non-technical cyber exposure
• Platform and intermediary liability under EU and cross-border regimes
• Strategic response to incidents involving digital trust failure

By treating cybersecurity as a legal and governance challenge, we help organisations identify vulnerabilities that technology alone cannot detect.