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NSO files defamation lawsuit against Calcalist over reports on police use of spyware

Cyber-surveillance firm demands NIS 1 million in damages that it says will be donated to help Holocaust survivors and victims of sexual assault, if it wins

An Illustration of a man holding his phone with an NSO Group logo with a computer screen in the background, in Jerusalem, on February 7, 2022. (Yonatan Sindel/Flash90)
An Illustration of a man holding his phone with an NSO Group logo with a computer screen in the background, in Jerusalem, on February 7, 2022. (Yonatan Sindel/Flash90)

Israeli spyware company NSO Group filed a defamation lawsuit on Sunday against financial daily Calcalist, owned by Yedioth Ahronoth, as well as the publication’s founder and publisher and editor-in-chief, over a series of articles in recent weeks alleging that the Israel Police illegally used the company’s spyware against activists, journalists, and government officials without judicial oversight.

The lawsuit, filed at the Rishon Lezion Magistrate’s Court, demanded NIS 1 million ($309,000) in damages.

NSO sent a letter to Calcalist last week warning that it would sue the publication over a number of exposés starting in mid-January that alleged police misuse of NSO’s powerful cyber-espionage tools, including Pegasus.

Calcalist has reported, without providing clear evidence, that dozens of high-profile figures — including former ministry directors, prominent business figures, and family members and associates of former prime minister Benjamin Netanyahu — were spied on by police using the NSO Group’s Pegasus spyware without court orders.

The series sparked an uproar in Israel that led to a Justice Ministry probe and further calls for a state commission of inquiry. Last week, Justice Minister Gideon Sa’ar said the shocking allegations published in Calcalist were “incorrect” and that the police had used the tool but there was no basis to allege widespread, unsupervised hacking. He nixed plans for a government inquiry into the affair.

The Calcalist reports built on an in-depth probe last summer that found that NSO’s software had been used by many countries with poor human rights records to hack the phones of thousands of human rights activists, journalists, and politicians from Saudi Arabia to Mexico.

The company denied the allegations and insisted that its spyware tools are meant to help governments, security services, and state agencies fight terrorism and organized crime.

But the torrent of international criticism over the allegations of misuse kept growing. The issue became a diplomatic concern with numerous Israeli allies, including France, that demanded answers after reports revealed the software was being used within their countries.

In early November, the US Department of Commerce blacklisted NSO, restricting the firm’s ties with American companies over allegations that it had “enabled foreign governments to conduct transnational repression.”

The embattled firm was also sued by Meta (Facebook) and Apple, most recently, for targeting its users with spyware tools and allegedly violating the companies’ respective terms of use.

In its lawsuit Sunday, lawyers for NSO wrote that Calcalist’s series of articles was not part of a “journalistic investigation but a one-sided, biased and false reporting that was made public in circumstances that raise real concerns regarding its purpose.”

The suit took aim at a report published last Tuesday by Calcalist that said NSO offers its clients a way to cover their tracks after a breach by deleting or amending logs on compromised cellphones. The article was taken down from the Calcalist site after NSO sent a warning letter.

NSO has maintained that it does not operate Pegasus for its clients and is not privy to the information its clients gather on targets via cloud architecture.

“Contrary to the lie that the newspaper chose to publish, the systems ‘log’ a complete record of all the actions performed by the client, and the client has no option to change or delete the documentation,” the lawsuit says.

NSO said the lawsuit was filed “solely for the purpose of uncovering the truth and presenting it publicly,” adding that any damages awarded by the court would be given to various organizations working “for the welfare of Holocaust survivors and victims of sexual assault.”

Times of Israel staff contributed to this report.

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