The Israeli government, which approves any sale of NSO’s software to foreign governments and considers the software a critical foreign policy tool, is lobbying the United States to remove the ban on NSO’s behalf. NSO has said it would fight the ban, but the executive set to take over NSO Group quit after the business was blacklisted, the company said.
One week after the federal ban, the United States Court of Appeals for the Ninth Circuit rejected NSO’s motion to dismiss Facebook’s lawsuit. The Israeli firm had argued that it “could claim foreign sovereign immunity.” A 3-to-0 decision by the court rejected NSO’s argument and allowed Facebook’s lawsuit to proceed.
Those developments helped pave the way for Apple’s lawsuit against NSO on Tuesday. Apple first found itself in NSO’s cross hairs in 2016, when researchers at Citizen Lab, a research institute of the Munk School of Global Affairs at the University of Toronto, and Lookout, the San Francisco cybersecurity company, discovered that NSO’s Pegasus spyware was taking advantage of three security vulnerabilities in Apple products to spy on dissidents, activists and journalists.
And the company is at risk of default, Moody’s, the ratings agency, warned. Moody’s downgraded NSO by two levels, eight levels below investment grade, citing its $500 million of debt and severe cash flow problems.
NSO’s spyware gave its government clients access to the full contents of a target’s phone, allowing agents to read a target’s text messages and emails, record phone calls, capture sounds and footage off their cameras, and trace the person’s whereabouts.
Internal NSO documents, leaked to The New York Times in 2016, showed that the company charged government agencies $650,000 to spy on 10 iPhone users — along with a half-million-dollar setup fee. Government agencies in the United Arab Emirates and Mexico were among NSO’s early customers, the documents showed.
Those revelations led to the discovery of NSO’s spyware on the phones of human rights activists in the Emirates and journalists, activists and human rights lawyers in Mexico — even their teenage children living in the United States.