Microsoft (MSFT) Joins Legal Fight Against Spyware Vendor NSO Group


Microsoft Corporation (MSFT) has joined a group of leading technology companies that have filed an amicus brief with the United States Ninth Circuit Court of Appeals in support of a lawsuit by Facebook, Inc. (FB) subsidiary WhatsApp Inc. against spyware vendor NSO Group Technologies Limited. Facebook-owned messaging service WhatsApp sued NSO Group in 2019, alleging that its software was used to hack 1,400 devices, some of which belonged to journalists and human rights campaigners. 

The companies that are joining forces in filing the amicus brief are Microsoft, Microsoft subsidiaries GitHub, Inc. and LinkedIn Corporation, Cisco Systems, Inc. (CSCO), Alphabet, Inc. (GOOG, GOOGL) subsidiary Google LLC, and VMware, Inc. (VMW), plus the Internet Association, a trade group whose members include a number of prominent tech firms.

  • Microsoft has filed a legal brief supporting the lawsuit by Facebook unit WhatsApp against spyware seller NSO Group.
  • Co-signers of the brief are Cisco Systems, Google, VMware, and the Internet Association.
  • NSO’s Pegasus software was used by authoritarian governments to spy on journalists and human rights campaigners.

The Case Against NSO Group

Based in Israel, NSO Group is the developer and seller of Pegasus spyware, whose customers are said to include the governments of Saudi Arabia, Ethiopia, the United Arab Emirates, the Kingdom of Bahrain, and Mexico, among others. Pegasus allows the user to mount stealthy hacks into the devices used by its targets, tracking victims’ locations, reading messages, listening to calls, and copying any sort of data on these devices.  

In the matter related to WhatsApp, Pegasus was so stealthy that it could be installed on a device simply by calling that device through WhatsApp. This happened whether or not the device’s owner answered.

In response to the suit by WhatsApp, NSO Group argued that it should be afforded sovereign immunity, since its tools are used by governments. In July 2020, a United States District Court judge rejected this argument.  

Microsoft’s Statement

in a strongly worded blog post entitled “Cyber Mercenaries Don’t Deserve Immunity,” Tom Burt, Corporate Vice President, Security & Trust at Microsoft, condemns NSO Group as a “21st-century mercenary” whose “weapons inflict harm on innocent people and businesses.”

In a key passage, Burt warns: “A growing industry of companies called private-sector offensive actors – or PSOAs – is creating and selling cyberweapons that enable their customers to break into people’s computers, phones, and internet-connected devices … We believe the NSO Group’s business model is dangerous and that such immunity would enable it and other PSOAs to continue their dangerous business without legal rules, responsibilities, or repercussions.”

Burt also notes: “The firm [NSO Group] also contributes to the urgent cybersecurity challenges discussed by our president Brad Smith last week.” Here he references a detailed call to action issued by Smith in the wake of the SolarWinds Corporation (SWI) hack.

Significance for Investors

Microsoft clearly is establishing itself as a leader in the field of cybersecurity. On the one hand, stepping up to neutralize problems that were not of its own doing, as in the SolarWinds case, will impose costs on Microsoft. On the other hand, success in these efforts, as well as the rising profile of Microsoft in cybersecurity advocacy, is bound to increase its credibility in the field, which should spur additional business.

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