Intel Cuts Business Ties With Spyware Maker NSO, Report Says

The American chipmaker instructs its employees to cut all ties with the Israeli spyware firm after the U.S. blacklisted NSO over accusations that its Pegasus software was used on hundreds of journalists and activists

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U.S. chipmaker Intel Corp's logo is seen on their "smart building" in Petah Tikva, near Tel Aviv, in 2019.
U.S. chipmaker Intel Corp's logo is seen on their "smart building" in Petah Tikva, near Tel Aviv, in 2019.Credit: Amir Cohen/ REUTERS

American chipmaker Intel has reportedly severed ties with Israeli spyware firm NSO after the U.S. Commerce Department said that it was adding the company to a trade blacklist this November, restricting its access to U.S. technology and potentially hobbling its ability to do business.

While American companies are still allowed to apply for waivers to do business with the controversial Israeli firm, Intel – which designs and manufactures the processors at the heart of many of the computers and servers sold around the world – has instructed its employees to cut all ties with NSO, according to a source who spoke with the Financial Times.

In a statement to the financial paper, Intel said that it “complies with all applicable U.S. laws, including U.S. export control regulations.”

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The U.S. sanctions against NSO came amid intensifying accusations that its Pegasus hacking software was used to spy on hundreds of journalists and human rights activists around the world. According to the Commerce Department, NSO’s technology was used “to maliciously target government officials, journalists, businesspeople, activists, academics, and embassy workers.”

“Such practices,” it said, “threaten the rules-based international order.”

Over the years, countless investigations, spearheaded by the Pegasus Project, have been published on NSO in particular and the misuse of its spyware. Pegasus software was reportedly used by client governments such as Bahrain, the United Arab Emirates, India, Hungary and other states to surveil the phones of reporters, lawyers, opposition politicians and civil society workers around the world.

Read more >> NSO Spyware Targeted Yemen War Crimes Investigator, Report Says ■  The Israeli cyber weapon used against 180 journalists ■ Israeli NSO Spyware Found on Phones of U.S. State Department Officials ■ Apple Sues Israeli Spyware Firm NSO Over Surveillance of Users ■ How Israeli Spy-tech Became Dictators' Weapon of Choice ■ Two UAE Princes Each Got Their Own Personal NSO Spyware ■ Global Reckoning Begins for Spyware and Its Tools of Repression

On December 3, Reuters reported that iPhones belonging to at least nine U.S. State Department employees either based in Uganda or focused on matters concerning the East African country were hacked by an unknown assailant using NSO spyware.

Afterwards, several U.S. lawmakers have asked the Treasury Department and State Department in a letter to sanction NSO under the Global Magnitsky Act, which punishes those who are accused of enabling human rights abuses by freezing bank accounts and banning travel to the United States.

The letter was signed by the Senate Finance Committee Chairman Ron Wyden, House Intelligence Committee Chairman Adam Schiff and 16 other Democratic lawmakers and cited the Reuters report in arguing that “to meaningfully punish [NSO] and send a clear signal to the surveillance technology industry, the U.S. government should deploy financial sanctions.”

Last month, Apple announced that it had filed a lawsuit against NSO and its parent company OSY Technologies for the surveillance and targeting of Apple users with its Pegasus spyware.

The iPhone maker said it is also seeking to ban NSO Group from using any Apple software, services or devices to prevent further abuse.

Apple’s suit came several weeks after a U.S. appeals court said that Facebook can pursue a lawsuit accusing NSO of exploiting a bug in its WhatsApp messaging app to install malware, allowing the surveillance of 1,400 people – including journalists, human rights activists and dissidents.

Facebook, now known as Meta Platforms Inc., sued NSO for an injunction and damages in October 2019, accusing it of accessing WhatsApp servers without permission six months earlier in order to install its Pegasus malware on victims' mobile devices.

Facebook's case drew support from Microsoft Corp, Google and Cisco, which in a court filing called surveillance technology such as Pegasus "powerful, and dangerous."

The ongoing scandal has caused significant damage to NSO, with credit rating agency Moody’s warning in late November that the first stands at risk of defaulting on around half-a-billion dollars' worth of debt.

According to Bloomberg, Moody’s dropped NSO’s credit rating by two levels, asserting that the company’s risk of defaulting on its debts had increased and noting that the company has been losing money since 2020.

Reuters contributed to this report.

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