The battle between social media giant Meta and Israeli offensive cyber firm Paragon has intensified. Following reports that Meta’s subsidiary WhatsApp sent a cease-and-desist letter to Paragon, demanding it stop spying on its users, Ynet learned on Monday that Paragon is considering its steps and, if necessary, will not hesitate to launch a battle.
"If the NSO affair (cyber company which produced the Pegasus spyware) repeats itself, the entire Israeli cyber industry could collapse,” A source close to the matter said. The NSO Group recently lost a legal battle against Meta. "This is a fight over the balance," the source added.
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Meta CEO Mark Zuckerberg, Paragon founder Ehud Barak
(Photo: SHAWN THEW/Pool via REUTERS, Kobi Koanx)
Over the weekend, Reuters and later The Guardian reported that Meta claimed nearly 100 smartphones of WhatsApp users were breached using Paragon’s Graphite spyware, most of the phones belonged to journalists or human rights activists.
It was reported that the phone of Italian journalist Francesco Cancellato, who published investigations against Italian Prime Minister Georgia Meloni’s government, was breached. Notably, the Italian government is a Paragon client.
Ynet also learned that Paragon currently is investigating the matter and will sever ties with any enforcement body found to have acted against individuals not suspected of crime or terrorism.
Cyber experts believe Meta is attempting to set new rules in the market after severely impacting NSO’s operations. Unlike the NSO case, where Meta coordinated with the U.S. government, Paragon is now an American-owned company compliant with former U.S. president Joe Biden’s executive order, which remains in effect under incumbent President Donald Trump.
"They decided to go head-to-head with Paragon to set new rules so no one dares breach their encryption," a senior source said. "This is one of the historic battles over the balance between privacy and security. Paragon is just the scapegoat."
Paragon prepares for battle
Paragon's U.S.-based owner AE is considering its steps and, if necessary, will not hesitate to launch a legal battle against Meta's claims. The company views the trial's outcome as crucial to its future and potentially to the entire offensive cyber industry.
Industry insiders question Meta’s move, which seems contrary to CEO Mark Zuckerberg’s efforts to maintain warm relations with the incoming Trump administration.
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A public fight against Paragon could disrupt U.S. security agencies that are clients, such as Homeland Security Investigations (HSI), part of ICE and the Department of Homeland Security (DHS) — two organizations Trump often praised.
A key question is why Meta chose this move after Paragon was sold to an American firm and following Trump’s election. "If they wanted to kill Paragon outright, they could’ve done it earlier and that would’ve ended Israel’s entire cyber industry," the source noted. However, he believes this is a calculated move, though its goal remains unclear.
Meta’s allegations
The conflict began with a letter from WhatsApp to Paragon, stating with "high confidence" that about 90 journalists and social activists were targeted and possibly harmed by the cyber company. WhatsApp demanded the company stop using its spyware to hack WhatsApp users’ devices or face legal action.
The alleged targets are from 20 countries, including European nations, but no Americans were reportedly affected – a key factor in U.S. litigation. For example, the lawsuit against NSO involved breaches of 1,400 devices.
Meta reportedly identified a group of "targets" tracked by Paragon’s software. However, doubts remain about whether Meta can identify these users or explain why they were monitored. If Paragon adheres to its ethical guidelines, it’s unclear how dozens of non-criminal individuals ended up under surveillance.
If the case goes to court, Paragon may call on Trump administration officials to testify about the need for law enforcement to hack devices of criminal or terror suspects.
US crackdown on cyber firms
In recent years, U.S. authorities have taken action against Israeli offensive cyber firms like NSO, Candiru and Intellexa. The companies’ tools can breach any smartphone, access documents, photos, recordings, and monitor owners. They’ve been accused of selling spyware to authoritarian regimes for targeting dissidents and even assassinations.
Paragon’s Graphite spyware focuses on recording voice calls and accessing documents. The company insists it operates under strict ethical constraints, selling only to democratic nations with judicial oversight of law enforcement.
Paragon has 35 government clients, all in democracies and has rejected countries like Mexico, India, Greece, Poland and Hungary due to misconduct. Italy may now join the list.
Founded in 2019 by Ehud Schneorson (former IDF intelligence unit 8200 commander), Ehud Barak (ex-prime minister and IDF chief), CEO Idan Nurick, Igor Bogdanov, Lior Avraham and Liran Alkobi, Paragon was acquired last year by U.S. private equity firm AE for $500 million, potentially rising to $900 million if business goals are met.
Though Israel’s Defense Ministry initially said in a statement that it did not approve the deal, the law does not require its approval. The ministry is currently updating Paragon’s ownership records and export licenses.