Government Spying Software

Hacking Team is an Italian malware company that sells exploit tools to governments. Both Kaspersky Lab and Citizen Lab have published detailed reports on its capabilities against Android, iOS, Windows Mobile, and BlackBerry smart phones.

They allow, for example, for covert collection of emails, text messages, call history and address books, and they can be used to log keystrokes and obtain search history data. They can take screenshots, record audio from the phones to monitor calls or ambient conversations, hijack the phone's camera to snap pictures or piggyback on the phone's GPS system to monitor the user's location. The Android version can also enable the phone's Wi-Fi function to siphon data from the phone wirelessly instead of using the cell network to transmit it. The latter would incur data charges and raise the phone owner's suspicion.
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Once on a system, the iPhone module uses advance techniques to avoid draining the phone's battery, turning on the phone's microphone, for example, only under certain conditions.
"They can just turn on the mic and record everything going on around the victim, but the battery life is limited, and the victim can notice something is wrong with the iPhone, so they use special triggers," says Costin Raiu, head of Kaspersky's Global Research and Analysis team.
One of those triggers might be when the victim's phone connects to a specific WiFi network, such as a work network, signaling the owner is in an important environment. "I can't remember having seen such advanced techniques in other mobile malware," he says.
Hacking Team's mobile tools also have a "crisis" module that kicks in when they sense the presence of certain detection activities occurring on a device, such as packet sniffing, and then pause the spyware's activity to avoid detection. There is also a "wipe" function to erase the tool from infected systems.

Hacking Team claims to sell its tools only to ethical governments, but Citizen Lab has found evidence of their use in Saudi Arabia. It can't be certain the Saudi government is a customer, but there's good circumstantial evidence. In general, circumstantial evidence is all we have. Citizen Lab has found Hacking Team servers in many countries, but it's a perfectly reasonable strategy for Country A to locate its servers in Country B.
And remember, this is just one example of government spyware. Assume that the NSA -- as well as the governments of China, Russia, and a handful of other countries -- have their own systems that are at least as powerful.