How Big a Security Risk are Browser Extensions?

Question

One of the more powerful features of modern day browsers is the ability for software developers to write browser extensions to enhance, modify and tweak the pages visited by the user. As more of our lives migrate onto the browser, aren't we potentially exposing ourselves to a massive privacy and security holes created by the installation of a browser extension that is malicious in nature?

I realize the source code of these extensions is extractable and readable if the author has not made attempts to obfuscate the behavior. But the effectiveness of this type of review is compromised by the browser encouraging users to keep their extensions up to date. While version 1.0 of an extension may be innocuous, a users browser may suggest an upgrade to version 1.1 which could contain malicious code which could be used to scrape information from the screen of the compromised browser.

As both a user and developer of browser extensions, is the developer's reputation the only thing in place to provide assurances to their users that their browsing activity will be secure? Are there any mechanisms in place to help protect users from a compromised browser extension?

Are there any best-practices to develop extensions in a manner that provides users with the assurance that the code they install and update is benign in nature?

Answer 1

Browser extensions can do almost anything user can do. They can send your bank passwords, read files on local disk, execute commands etc. Security of a browser depends not only on browser itself, but also on all installed extensions.