NSO Group
NSO Group REUTERS/Amir Cohen/File Photo

US defense contractor L3Harris is in talks to take over NSO Group’s surveillance technology, in a possible deal that would give an American company control over one of the world’s most sophisticated and controversial hacking tools, The Guardian reported on Tuesday.

Multiple sources quoted in the report confirmed that discussions were centered on a sale of the Israeli company’s core technology – or code – as well as a possible transfer of NSO personnel to L3Harris. However, any agreement still faces significant hurdles, including requiring the blessing of the US and Israeli governments, which have not yet given the green light to a deal.

A senior White House official said in response, “Such a transaction, if it were to take place, raises serious counterintelligence and security concerns for the US government.”

Asked to comment on the talks, an L3Harris spokesperson said, “We are aware of the capability and we are constantly evaluating our customers’ national security needs. At this point, anything beyond that is speculation.”

The White House said that it had not been involved in “any way in this reported potential transaction”.

The senior White House official also said the US government “opposes efforts by foreign companies to circumvent US export control measures or sanctions, including placement on the US Department of Commerce’s Entity List for malicious cyber activity”.

One person familiar with the talks said that if a deal were agreed, it would probably involve selling NSO’s capabilities to a drastically curtailed customer base that would include the US government, the UK, Australia, New Zealand and Canada – which comprise the “five eyes” intelligence alliance – as well as some NATO allies.

Any deal would also face hurdles in Israel. One assumption in the Israeli cyber industry is that it would have to keep oversight of the Israeli-made technology in Israel, and keep all development of Pegasus and personnel in Israel.

NSO is regulated by the Israeli Ministry of Defense, noted The Guardian, which has had ultimate say over the company’s government clients.

NSO’s Pegasus software has been linked to abuses by governments.

In February, the Finnish foreign ministry said it had detected Pegasus in several phones used by its diplomats abroad.

The Finnish announcement followed a report in The New York Times which said that former Prime Minister Benjamin Netanyahu worked to ensure that Saudi Arabia would be able to use the Pegasus software, around the time that the Abraham Accords were signed with the United Arab Emirates (UAE).

More recently, Canada's Citizen Lab group said that at least 65 people linked to the Catalan separatist movement had been targets of the Pegasus spyware after a failed independence bid in 2017.

The US Commerce Department recently blacklisted NSO Group, prohibiting it from using American technology in its operations.

Apple sued the Israeli firm in late November, seeking a permanent injunction to ban NSO Group from using Apple software, services, or devices.