Android Market Security Update from Google

Android Market Security Update from Google
Google reported that within minutes of becoming aware, a number of malicious applications published to Android Market have been removed, and the associated developer accounts have been suspended. The malicious applications took advantage of known vulnerabilities which don’t affect Android versions 2.2.2 or higher. According to the report, for affected devices, the only information the attacker(s) were able to gather was device-specific (IMEI/IMSI, unique codes which are used to identify mobile devices, and the version of Android running on your device). But given the nature of the exploits, the attacker(s) could access other data.

Google has contacted law enforcement about the attack and is also remotely removing the malicious applications from affected devices. This remote application removal feature is one of many security controls the Android team can use to help protect users from malicious applications.

From the official blog,
We are pushing an Android Market security update to all affected devices that undoes the exploits to prevent the attacker(s) from accessing any more information from affected devices. If your device has been affected, you will receive an email from over the next 72 hours. You will also receive a notification on your device that “Android Market Security Tool March 2011” has been installed. You may also receive notification(s) on your device that an application has been removed. You are not required to take any action from there; the update will automatically undo the exploit. Within 24 hours of the exploit being undone, you will receive a second email.

We are adding a number of measures to help prevent additional malicious applications using similar exploits from being distributed through Android Market and are working with our partners to provide the fix for the underlying security issues.
Google also notes that security is a priority for the Android team, and they're committed to building new safeguards to help prevent these kinds of attacks from happening in the future.
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