NSO Competitor QuaDream Shutting Down After Finding It Can’t Make Money If It Can’t Sell To Human Rights Abusers
from the heckuva-business-model-you-got-there,-malware-merchants dept
NSO Group is on the ropes after years of self-inflicted damage metastasized into months of negative news coverage. Since worldwide exposure of its customers’ abuse of its malware, as well as exposing the sort of people NSO chose to deal with, the company has discussed getting out of the offensive spyware business — a move that might simply become a much shorter phrase: going out of business.
Its competitors are no better. Not only are the products offered by fellow Israeli exploit hawkers like Candiru and QuaDream less elegant than NSO’s premium “Pegasus” product, the competitors have shown they’re equally willing to mix it up with the leaders of countries with miserable human rights records. And, just like NSO Group, its customers are more than willing to use powerful spyware to target critics, journalists, activists, and opposition leaders.
The US blacklisted Candiru and NSO Group. Israel, forced to respond after its favored spyware company produced headlines too big to ignore, finally created a blacklist of its own, forbidding local tech companies from selling their products to some of their biggest (but now, former) customers.
QuaDream hoped to fill the void left by NSO’s seeming exit from the market. It did this by trying to plant its flag on restricted ground — just one of several details included in this report by Israeli news outlet, Haaretz.
Claims that Pegasus was used by Moroccan operators to attempt to target a phone linked to French President Emannuel Macron sparked a small diplomatic crisis between Jerusalem and Paris, with then-Defense Minister Benny Gantz visiting France to try to assuage their concerns.
According to sources, NSO failed to obtain authorization to renew its Morocco contract. QuaDream, whose talks with Morocco began earlier, didn’t receive a green light, either.
Heading back to blacklisted countries appeared to be QuaDream’s business model. Since it couldn’t compete with NSO in Europe, it began pitching deals in Asia, Africa, and in several Arab nations. Meeting with blacklisted governments doesn’t necessarily violate the Israeli government’s export restrictions, but it seems like an extremely inefficient way to drum up business since it’s unlikely the government would grant sales licenses, at least not while the international press heat is still noticeable.
Of course, QuaDream — at that point — still apparently did international business through a Cyprus-based front company, so it may have been planning to secure deals and route around restrictions by having its extraterritorial bag man handle the handoff. But even if that was the plan, it was undercut by a legal dispute over money QuaDream’s front company (InReach) alleged was never paid to it by the Israeli spyware seller.
A series of unforced errors (which includes courting autocrats) has now reduced to QuaDream to less than the sum of its parts. According to the Haaretz report, the company is now holding a “GOING OUT OF BUSINESS” sale since it can no longer make money the way it used to: by selling spyware to autocrats.
With no ability to make new deals, and both these and other efforts failing to reach fruition – albeit for different reasons – the firm decided to cut its losses and close up shop.
QuaDream is now working to sell off some of its assets to local competitors, according to two of the sources. Its research teams and outgoing staff are interviewing with other offensive cyber firms, they say.
That confirms what was suspected a few months ago, when QuaDream held an all-hands meeting to inform several pairs of hands their services would no longer be needed.
Adding injury to injury, an employee apparently accidentally leaked some of its code online, which may harm the market price of the malware code it hopes to unload as its completes its implosion.
Pieces of QuaDream’s code, which was leaked by an employee, likely by mistake, revealed not just the existence of Reign, but also Blue Spear – a previously unknown program that seems to serve as the web interface through which the targeted devices are likely infected. (Click here for a full technical analysis)
Chances are QuaDream won’t be the last of the malware merchants located in Israel to fold. The market can only support so many exploit providers. And the market — at least for now — has been severely restricted by the Israeli government, reducing the list of government-approved customers from 100 countries to only 35. Anyone left on the supply side is pitching the same stuff to the same people. The ones willing to pay a premium to spy on their political enemies (rather than criminals or terrorists) are, for the moment, no longer an option. Plenty of supply, but very little legitimate demand. And these companies have no one to blame but themselves for the situation they’re in now.
Filed Under: human rights, spyware, surveillance
Companies: quadream
Comments on “NSO Competitor QuaDream Shutting Down After Finding It Can’t Make Money If It Can’t Sell To Human Rights Abusers”
Can’t compete with ~~free~~ an industry willing to get paid in limbs
should be illegal
Sales of malware should be illegal, and Israel should be shamed.
At what point does a captain of industry look at their business model (assuming they have one) and say, ‘What the hell were we thinking?’
I think it is only when there is no money, they do not care about anything else.
The majority of captains have their letters of Marque and only worry when their ship is sinking beneath them.