Israel democracy watchdog calls for ‘smart regulation’ for NSO spyware sales

Sales of software like Pegasus called ‘challenge’ for democracies; think tank says better oversight needed to ensure multinational tech firms continue to invest in Israel

Shoshanna Solomon was The Times of Israel's Startups and Business reporter

The ‘Digital Violence: How the NSO Group Enables State Terror’ platform that details the operations of Israeli company NSO Group, as part of an investigation in July 2021 by Amnesty International and Citizen Lab. (Courtesy)
The ‘Digital Violence: How the NSO Group Enables State Terror’ platform that details the operations of Israeli company NSO Group, as part of an investigation in July 2021 by Amnesty International and Citizen Lab. (Courtesy)

Israel needs “smart regulation” to ensure that controversial software like Pegasus, developed by the Israeli spyware firm NSO Group, can be used to detect dangerous criminals without harming human rights, an Israeli democracy watchdog has said.

Dr. Tehilla Shwartz Altshuler, director of the Democracy in the Information Age program at the Israel Democracy Institute, said in a statement that “regulation of dual-use programs, such as Pegasus, present a unique challenge for democracies like Israel where every transaction by companies such as NSO are officially approved by the defense establishment.

“While there is no doubt that law enforcement agencies around the world utilize this technology to apprehend dangerous criminals, the allegations that the NSO technology was used to quash dissent and track individuals who are critical of governments are indeed troubling,” said Shwartz Altshuler.

“If Israel wants to ensure that multinational technology companies continue to invest and partake in the local ecosystem,” she added, “then it is vital to enact smart regulations that allow these powerfully effective technologies to still be utilized and sold while at the same time ensuring that, once it in the hand of foreign government, they are not used to harm the rights and freedoms of innocent individuals.”

An in-depth investigation by 17 major international news organizations published Sunday claims that the embattled Israeli cybersecurity firm NSO Group has sold cellphone malware used to target journalists, activists and politicians in dozens of countries.

The investigation, titled the Pegasus Project, identified at least 180 journalists in 20 countries who were selected for potential targeting between 2016 to June 2021.

Dr. Tehilla Shwartz Altshuler, a research fellow at the Israel Democracy Institute. (Courtesy)

Pegasus can hack into cellphones without a user knowing, enabling clients to read every message, track a user’s location and tap into the phone’s camera and microphone undetected.

NSO Group on Wednesday denied being engaged in mass surveillance, calling the allegations against it “insinuations and slander.”

“False allegations have been published against us that ignore the facts,” the company said in a statement announcing that it would not be responding to further requests to comment on the claims. “We will not play the game of insinuations and slander.”

The company said that “an orchestrated campaign is being carried out against us.”

French President Emmanuel Macron has called an urgent national security meeting for Thursday to discuss the Israeli-made Pegasus spyware after reports about its use in France emerged this week, a government spokesman said.

Israel is establishing a commission to review allegations that NSO Group’s controversial Pegasus phone surveillance software was misused, said MK Ram Ben-Barak, the head of the Knesset Foreign Affairs and Defense Committee on Thursday.

The NSO controversy has shone a harsh light on the Israeli cybersecurity industry, which has already been in the spotlight over concerns about human rights violations.

In March last year Microsoft divested from its investment in AnyVision, a facial recognition startup that reportedly scans faces at Israeli military checkpoints, even though the tech giant couldn’t substantiate claims that the startup’s technology is used unethically.

Earlier this month AnyVision said it raised $235 million from investors including SoftBank Vision Fund 2 and Eldridge. The investment is one of the largest funding rounds in the visual intelligence space in Western markets, AnyVision said in a statement.

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