Israeli spyware firm blocks Italy following reports of misuse

Jerusalem: Israeli spyware maker Paragon has terminated its dealings with Italy, including disconnecting its access to a military-grade surveillance technology Graphite, following reports of misuse of the intrusive technology to target detractors of the government in a possible case of human rights abuse, a media report said on Thursday.

The decision follows allegations by WhatsApp on Friday that the software which is capable of hacking into encrypted smartphones was used to breach the accounts of nearly 100 journalists and civil society activists, with three potential victims actively critical of the current Italian regime of far-right Prime Minister Giorgia Meloni, Ha'aretz reported.

Paragon works exclusively with state entities, including the Israeli security establishment, the FBI and others in the US, providing them with hacking capabilities in the form of spyware called Graphite.

Israeli technology firm NSO Group had recently grabbed global attention, including in India, amid allegations of misuse of its controversial spyware Pegasus, evoking widespread debate regarding the use of such intrusive technologies.

NSO has maintained that its spyware is used by government clients to target terrorists and other serious crimes.

Israel has several prominent companies whose spyware makes it possible to infect the cell phone of the victim of the surveillance and afterwards enables the operator to eavesdrop on conversations, read apps with encrypted messages, provide total access to contacts and files on the device, enable to eavesdrop in real time on what is taking place around the cell phone by operating the camera and the microphone.

As per the Ha'aretz report, Paragon also has several clients in Europe, specifically in the EU, among them Italy, where it works with two different bodies, a law enforcement agency and an intelligence organisation.

This is the first time the company, which was recently sold to an American defence contractor, has been linked to cases where the technology may have been abused, the report said.

Sources with knowledge of the incident told Ha'aretz that following the revelations Paragon demanded that Italy respond to the allegations and provide them with details about the alleged hacking.

The two Italian clients were reportedly disconnected from Graphite and lost access to the spyware at the start of the week.

The Italian government is said to have responded on Wednesday to the claims of the alleged breach, denying the claims to Paragon and later to the public in a statement from the Prime Minister's Office.

The statement denied targeting journalists and even seemed to shift the blame to other European nations, the report said.

"The users involved so far belong to numbers with telephone prefixes attributable, in addition to Italy, to the following countries: Belgium, Greece, Latvia, Lithuania, Austria, Cyprus, Czech Republic, Denmark, Germany, Netherlands, Portugal, Spain and Sweden," the Italian statement was quoted as saying, de facto providing a list of Paragon clients in the EU.

Paragon, it seems, did not accept the Italian explanation, Ha'aretz reported.

Paragon's US owners and Israeli management had decided not to reinstate the Italian clients' access and to terminate all ties with the country effective immediately, The Guardian is said to have reported earlier on Thursday, which Ha'aretz confirmed later.

"One possible explanation is that Paragon believes the Italians are lying, as the company can review client usage of its system when there are credible concerns of misuse or violations of its so-called 'end user agreement', as was allegedly the case here," the media report said.

Spywares like Graphite and Pegasus were developed for counterterrorism and serious crime prevention – offences that under Israeli defence export laws, carry a minimum sentence of six years.

Sources familiar with offensive cyber exports reportedly said that if one of Paragon's two Italian clients indeed used the spyware to hack the devices of a journalist and a political activist, it would have violated both Israeli export regulations and the company's contractual terms.

Paragon was expected to demand an explanation from the client, who would then have to justify the breaches or risk losing its license and being cut off from the system, Ha'aretz reported.