What's worse than no cryptography? Weak cryptography.
Why? Because if you have weak encryption (which few programmers, let alone users, really understand), users, managers, and corporate management believe their secrets are protected. At least, if you have no encryption, then no one is surprised to learn that documents can be easily compromised.
Many companies and individuals rely on the encryption technology provided by Microsoft for Office users but this is not a seriously secure encryption tool, as a recent academic paper demonstrates.
Hongjun Wu, a Chinese cryptographer/mathematician, recently found serious vulnerabilities in the encryption used to protect a common class of Excel and Word files.
Wu discovered that RC4 is being critically misused in both Microsoft Word and Excel file encryption. RC4 is a stream cipher that can be applied with up to a 128-bit encryption level on any Word or Excel file.
A report in ZDNet highlighted this problem on January 10. The problem isn't terribly complex; in fact, it is a very basic vulnerability where multiple files are being encrypted using a fixed algorithm and the same password. This can easily be overcome by using different initialisation vectors, but Microsoft Office fails to do this in some very common circumstances.
Note on basic encryption
For those who aren't familiar with even basic cryptography technology, it is common to use the same password and encryption algorithm. If you do this twice with similar information, then cracking one document is almost a trivial exercise when a second example is available. The use of XOR to compare two versions of a document is a well-known decryption tool. The way around this is simpleâ€"use a different factor as a starting point for each separate document being encrypted.
Microsoft Office does use a different initialisation vector for each new document but the problem lies in the way it treats edited documents. Every time you open, edit, and resave the document, it is encrypted using the same key -- since many documents are saved in multiple versions or are backed up, cracking the document can be relatively easy. This could apply to stolen backups, stolen PCs, discarded hard drives, or when multiple users pass an encrypted file back and forth.
Details proving the problem are available in an academic paper. This doesn't include an exploit, and getting plaintext data out of the encrypted files isn't a job for a script kiddie; however, a serious security professional would find the task relatively simple.
This vulnerability affects Microsoft Excel and Word documents saved using the provided Microsoft encryption system.
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