Panasonic Avionics Corporation

Panasonic Avionics Corporation is a supplier of multimedia systems for installation in aircraft of various classes. Founded in 1979, the company is part of Panasonic Corporation of North America, the main North American division of Panasonic Corporation. Panasonic Avionics is headquartered in Lake Forest, California. The company employs about 3.1 thousand employees in 80 offices located almost around the world. Customers of Panasonic Avionics Corporation solutions are more than 200 companies that operate over 3.7 thousand IFEC systems installed in aircraft (data for 2016).

2019: Spy cameras found in monitors on seat backs of planes of three airlines

In August 2019, the question of spy cameras embedded in the backs of aircraft seats was raised again. Earlier, several airlines, including Singapore Airlines, United Airlines and American Airlines, confirmed that surveillance cameras were built into their entertainment systems, prompting widespread public response.

It turned out that Panasonic Avionics, which supplies entertainment systems for many major airlines, decided to integrate cameras into the seat backs of aircraft. The idea was to simplify customs checks before departure and upon arrival, but the introduction of this kind of device turned out to be a violation of confidentiality. Airlines claimed they had no plans to activate the surveillance system on board.

Spy cameras found in monitors that are built into the seats of United Airlines, American Airlines and Singapore Airlines

However, in late July 2019, Hong Kong airline Cathay Pacific said it was recording passenger activity on its planes using hidden video cameras. The airline also says data can be shared with third-party partners for marketing purposes. This information appeared in updated documents regarding the company's privacy policy.

Cathay Pacific has confirmed it is collecting images of passengers while they are on board, as well as recording the use of the entertainment system and passenger activity during the flight. The company says cameras video surveillances (one camera located next to the cabin door) are installed in airport lounges and on board the aircraft, in accordance with standard practice to protect customers and staff.

All images are protected from unauthorized access. Cathay Pacific, however, denies having cameras, microphones or sensors built directly into entertainment systems.^[1]

2018: $280 million fine for bribes

At the end of April 2018, Panasonic agreed to pay a $280 million fine for settling proceedings in which Panasonic Avionics, a subsidiary manufacturer of aircraft infotainment systems, was accused of corruption.

The company itself, which violated the American Foreign Corrupt Practices Act (FCPA), will transfer $137 million to the US Department of Justice, and the parent Panasonic will pay about $143 million to the US Securities and Exchange Commission (SEC) for illegal profit.

Panasonic fined $280 million for bribes

American authorities said Panasonic Avionics hired consultants for "improper" purposes and hid payments to trading partners in China and other Asian countries. In one case, a consultant was a major official who negotiated between Panasonic and a certain state-owned airline in the Middle East. For six years, this civil servant was paid a total of $875 thousand, despite the fact that he "worked little," and the company itself earned more than $92 million in profit thanks to him.

According to the SEC, the company overestimated profits in one quarter of 2012 by entering into an agreement with the airline retroactively. The US Department of Justice reported that Panasonic Avionics fired several executives who were directly involved in the fraud or knew about them.

Panasonic Avionics also admitted to hiding the use of some agents in Asia that do not meet the company's requirements. The company hid transfers of more than $7 million to at least 13 agents between 2007 and 2016.

We are pleased to settle these investigations. In recent years, we have taken great steps to improve the compliance programs and internal control of Panasonic Avionics, "said CEO Hideo Nakano.[2]

2017: Suspected bribes

In early February 2017, the US authorities began an investigation against Panasonic on suspicion of corruption by the company's "daughter."

Panasonic made a statement to the Tokyo Stock Exchange according to which the Department of Justice (DOJ) and the US Securities and Exchange Commission (SEC) are investigating, suspecting Panasonic Avionics of violating the Foreign Corrupt Practices Act (FCPA).

What exactly became the subject of the investigations is not specified. Panasonic only said that the company is working closely with the authorities to resolve this issue as soon as possible.

Authorities USA suspected Panasonic of corruption

In March 2013, The Wall Street Journal, citing informed sources, reported that the US authorities suspected Panasonic Avionics of paying bribes to airline employees abroad, as well as government officials. Bribery, according to the publication, was committed to increase profits.

Immediately after it became known about the investigation of the possible participation of Panasonic Avionics in a corruption scandal, the company announced the resignation of its CEO Paul Margis, who had led Panasonic Avionics since 2005. His place was taken by the deputy Hideo Nakano. Panasonic did not give a reason for the change of head in the division for the development of multimedia systems for airliners.

On the day Panasonic reported an investigation by the US authorities into Panasonic Avionics, shares of the Japanese corporation fell 2.7% in value, the worst decline during the day in the three previous months.

Credit Suisse Group analyst Mika Nishimura noted that the scandal around Panasonic Avionics will be closely watched as there is a possibility of a fine.^[3]

2016: Vulnerabilities in entertainment systems

In December 2016, it became known about vulnerabilities in entertainment and communication systems on board developed by Panasonic. It turned out that hackers can gain remote access to the aircraft's electronics.

IOActive, an information security company, has published a report on vulnerabilities found in In-Flight Entertainment and Connectivity (IFEC) manufactured by Panasonic Avionics, which are used by the world's largest airlines, including Emirates, Air France, United Airlines, American Airlines, Virgin and Qatar Airways.

Panasonic Onboard Information System

Experts have found that on board the plane, a hacker can intercept control over a speakerphone system, lighting and displays designed for passengers. In some cases, an attacker may even gain access to passenger bank card information.

IOActive claims that during the experiment, specialists managed to gain access to flight control data, as well as change the aircraft altitude and location indicators. Cybercriminals can theoretically take advantage of this loophole and seize control of the aircraft through entertainment systems.

I don't think these systems can withstand the attacks of skilled hackers. It depends only on the decisiveness and intentions of the attacker, from a technical point of view, attacks are quite feasible, - said IOActive specialist Ruben Santamarta, who published a report on the vulnerabilities of entertainment and communication systems on board.

The IOActive notified Panasonic that its aircraft electronics were susceptible to hacking, but it is not known whether the company has taken any measures to fix the problem. The manufacturer refrains from commenting.^[4]

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