New Android Phones Have Pre-Installed Software That Secretly Sends User Data to China

Matt Apuzzo and Michael S. Schmidt

November 15, 2016

Secret Backdoor in Some U.S. Phones Sent Data to China, Analysts Say

WASHINGTON — For about $50, you can get a smartphone with a high-definition display, fast data service and, according to security contractors, a secret feature: a backdoor that sends all your text messages to China every 72 hours.

Security contractors recently discovered preinstalled software in some Android phones that monitors where users go, whom they talk to and what they write in text messages. The American authorities say it is not clear whether this represents secretive data mining for advertising purposes or a Chinese government effort to collect intelligence.

International customers and users of disposable or prepaid phones are the people most affected by the software. But the scope is unclear. The Chinese company that wrote the software, Shanghai Adups Technology Company, says its code runs on more than 700 million phones, cars and other smart devices. One American phone manufacturer, BLU Products, said that 120,000 of its phones had been affected and that it had updated the software to eliminate the feature.

Kryptowire, the security firm that discovered the vulnerability, said the Adups software transmitted the full contents of text messages, contact lists, call logs, location information and other data to a Chinese server. The code comes preinstalled on phones and the surveillance is not disclosed to users, said Tom Karygiannis, a vice president of Kryptowire, which is based in Fairfax, Va. “Even if you wanted to, you wouldn’t have known about it,” he said.

Security experts frequently discover vulnerabilities in consumer electronics, but this case is exceptional. It was not a bug. Rather, Adups intentionally designed the software to help a Chinese phone manufacturer monitor user behavior, according to a document that Adups provided to explain the problem to BLU executives. That version of the software was not intended for American phones, the company said.

“This is a private company that made a mistake,” said Lily Lim, a lawyer in Palo Alto, Calif., who represents Adups.

The episode shows how companies throughout the technology supply chain can compromise privacy, with or without the knowledge of manufacturers or customers. It also offers a look at one way that Chinese companies — and by extension the government — can monitor cellphone behavior. For many years, the Chinese government has used a variety of methods to filter and track internet use and monitor online conversations. It requires technology companies that operate in China to follow strict rules. Ms. Lim said Adups was not affiliated with the Chinese government.

At the heart of the issue is a special type of software, known as firmware, that tells phones how to operate. Adups provides the code that lets companies remotely update their firmware, an important function that is largely unseen by users. Normally, when a phone manufacturer updates its firmware, it tells customers what it is doing and whether it will use any personal information. Even if that is disclosed in long legal disclosures that customers routinely ignore, it is at least disclosed. That did not happen with the Adups software, Kryptowire said.

According to its website, Adups provides software to two of the largest cellphone manufacturers in the world, ZTE and Huawei. Both are based in China.