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Chinese firm accused of mobile malware ruse

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Chinese security firm NetQin has been accused of conspiring to plant malicious software on users' handsets in order to drum up business for its mobile security software.

NetQin denies the alleged ruse, the mechanics of which were broadcast during a recent episode of 3.15 Gala, a Chinese consumer rights programme on state-run TV (CCTV).

Chinese phone dealers often install third-party applications, in return for payment of around RMB 2 Yuan (30 US cents) per application, when they modify a phone's firmware, so that a phone intended for Europe or the US can operate in China.

One of the applications installed on Symbian smartphones that go through this process is called Feiliu, software that attempts to download and install additional components whenever an internet connection is available.

Feiliu is designed to remove security products that might be present on the device, while making the operation of the phone sluggish and prone to crashes. Fortunately NetQin offers to remove the app, which it detects as malware, for around 2 Yaun a time.

NetQin, the market leader in Chinese mobile security, is the second largest investor in the firm that developed Feiliu, a factor that has increased suspicion about the whole business. Furthermore the co-founders for NetQin and Feiliu worked on their PhDs together.

Western security firms were quick to condemn NetQin's close relationship with Feiliu, which inevitably raises suspicions about the whole unseemly business of planting unrequested applications on mobiles before charging for their removal.

"We learnt from the CCTV video and transcript that staff from Feiliu admit that co-founders for NetQin and Feiliu worked on their PhDs together and NetQin had an investment of 495,000 Yuan in Feiliu, making NetQin the second largest shareholder," said Mark Harris, VP of SophosLabs. "All this certainly seems to suggest that the two companies are plotting together rather strategically, at the cost of the mobile phone users affected."

Sophos has more background on the story, and links to further information, in a blog posting here. ®

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