Defense Ministry sets sights on ADINT companies

Defense Ministry bars ADINT exports  credit: Shutterstock
Defense Ministry bars ADINT exports credit: Shutterstock

Under US pressure, Israel's Ministry of Defense has barred Rayzone from exporting its surveillance tool based on the target's exposure to advertisements.

Over the past year, the Ministry of Defense has dramatically reduced the marketing and sales permits it grants to cyber-offensive companies, leading to layoffs and lower sales at spyware giant NSO Group, and the closure of companies like QuaDream, Nemesis, and Insight, and the cyber-offensive divisions at companies such as Cognyte and KELA .

"Globes" has learned that the Israeli Defense Export Controls Agency (DECA) at the Ministry of Defense has expanded these restrictions to another, closely-related industry: advertising Intelligence.

This industry, which has been operating under the radar for years, develops covert systems used to identify people based on their exposure to online advertisements. Like the offensive cyber industry, advertising Intelligence ("ADINT" in industry parlance) helps security organizations with espionage-related tasks, but has been considered technologically inferior because it does not allow for data extraction from devices by infecting them with spyware.

Up till now, the ADINT companies operated without DECA supervision as they use open ad exchanges (open marketplaces), and artificial intelligence to identify suspects. Now, however, "Globes" has learned that at least one company, Tel Aviv-based Rayzone, has developed a product which is complementary to its location-based system, and allows security organizations to install spyware more easily.

As far as is known, DECA has not permitted the sale of this system to foreign customers, even though it is a marginal product for Rayzone, which chiefly makes its living from cyber products and artificial intelligence.

One reason is that such a system is highly effective, enabling mobile phones to be infected by spyware through user exposure to online ads. This technology is more advanced than those of other providers, such as NSO, which facilitates hacking based on vulnerabilities in operating systems and applications, with dozens of researchers on its payroll to locate these weaknesses. An ADINT-based espionage system does not need to detect vulnerabilities, and is therefore of concern to DECA. The Biden administration in the US has made it clear to the Ministry of Defense that it will not tolerate the export of spyware to non-democratic countries.

"Globes" received no response from Rayzone, Bsightful, or the Ministry of Defense.

Combining intelligence and advertising

The ADINT industry combines two technological sectors in which Israel excels: intelligence and advertising. Until a decade ago, the field in Israel was dominated by companies such as Conduit, ironSource, and Perion Network, which specialized in integrating intelligence methods into advertising platforms, with the aim of improving the match between advertising and user, and maximizing ad revenue from applications, toolbars, and browsers.

This domination even earned Tel Aviv the dubious nickname "Download Valley," thanks to companies specializing in advertisements for search engines and software installation on computers and mobile phones, sometimes without the express consent of the user.

In recent years, two Israeli companies have stood out in the advertising intelligence market: Rayzone and Bsightful. These companies extract data from the ad exchanges that typically work with advertisers, allowing the advertisers to target those users most likely to click on the ad.

Such data can include, for example, the user’s geographical location and browsing habits. In fact, the advertising exchanges hold all essential information about their users, aside from their identity. Instead, the data is linked to serial numbers representing the different users.

Rayzone operates "Echo", a service it provides to security authorities, which infers the physical location of users by analyzing data extracted from open ad exchanges. In this way, authorities can identify a suspect’s location. However, to carry out additional activities, such as an arrest or wiretap, they must use other tools such as sending a police unit to the suspect’s home to make an arrest, or parking near the suspect’s apartment with a tactical mobile unit capable of penetrating the WiFi network, and infecting their mobile phone with spyware.

Because Rayzone and similar companies do not hack into the user's mobile phone, but instead rely on statistical inference based on open data, a permit from DECA is not required.

Registered in the guise of an advertiser

Rayzone and the other companies extract data from ad exchanges using means that cannot be identified by the marketplaces: it is registered on the open ad exchanges in the guise of an advertiser, and has even established two Israeli subsidiaries that connect advertisers with ad exchanges: Impulse Programmatic and Oxylon.

Rayzone was established in 2010 by security establishment veterans Ron Zilka, Yohai Bar Zakay Hasidoff (a former deputy commander of IDF signals intelligence unit 8200), and Matan Caspi. In its early years, it offered a service to security authorities for locating suspects based on vulnerabilities in wired and cellular communication technologies, a market that has since diminished in the wake of advances in cellular technology and a decline in landline telephone communications.

The company is also behind the Big Data-based investigation platform TA9, which enables law enforcement authorities to conduct investigations, and close cases faster, and recently even signed a long-term agreement with the Belgian Federal Police. In addition, Rayzone provides enterprises with cyber consulting services.

Another Israeli company sharing the ADINT sector with Rayzone is Bsightful of Herzliya, co-founded by entrepreneurs Avraham Bahron, Guy Gildor, Guy Amir, and Asher Elazar . (Cognyte - the former defense products division of Verint - is also an investor). While Rayzone relies more on browser-based advertising exchanges, Bsightful works with native mobile apps (advertisements embedded in smartphone applications). Unlike Rayzone, Bsightful does not have a website, and its employees do not list the company as their place of work on LinkedIn.

The Israeli companies also have an American competitor, Venntel of Virginia - home of the US intelligence agencies - which was previously investigated by Congress at the initiative of Senator Elizabeth Warren, Democratic senator for Massachusetts.

Venntel had contracts with the US Department of Homeland Security, Inland Revenue Service, and the Federal Bureau of Investigation. In the past, "Business Insider" claimed that Venntel had helped US immigration authorities locate illegal immigrants crossing the border from Mexico to the US. According to estimates, Rayzone, Bsightful and Venntel share the ad-based intelligence sector market, which generates tens of millions of dollars a year.

"Use for purposes other than advertising is a violation of privacy"

Adv. Oshrit Aviv , a compliance, regulation and ethics consultant for technology companies, claims that even if the ad exchange data is obtained legally, its use for purposes other than advertising should be considered a breach of contract and moreover, of the basic right to privacy. "Anyone who has a ‘seat’ on an advertising exchange, or works with data providers, signs a contract that stipulates the permitted uses.

"From the legal aspect, this is also a problematic issue, especially in European countries and California where privacy laws are stricter," says Aviv. "Locating people by combining data sets creates potential vulnerabilities that allow other software to piggyback on it, and the very fact that users do not have the ability to understand what is going on ‘behind the scenes’ of their phones makes this activity illegitimate. The security laws in the US allow tracking to be carried out more easily than in other countries, so long as there is reasonable suspicion, even without a judge's warrant. This is one reason why European countries find it difficult to permit data transfer from local companies to American ones.

"The intelligence companies claim these data do not identify users specifically, but the privacy laws in many countries consider the data extracted from advertising exchanges as personal, even sensitive, information in every way," says Aviv. "Users are characterized according to their general location, what they said a minute or two ago, or the last few seconds of their surfing history."

For their part, the intelligence companies are also equipped with legal opinions that protect them, and their clients, from going beyond the laws and regulations.

Published by Globes, Israel business news - - on July 16, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.

Defense Ministry bars ADINT exports  credit: Shutterstock
Defense Ministry bars ADINT exports credit: Shutterstock
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