US security firm Kryptowire has identified Android smartphones with a "backdoor" software in the country that collected sensitive personal data and transmitted this data to third-party servers in China without disclosure or the users' consent.
These devices were available through major US-based online retailers like Amazon and BestBuy and included popular smartphones such as BLU R1 HD devices, Kryptowire said in a statement.
"The core of the monitoring activities took place using a commercial Firmware Over The Air (FOTA) update software system that was shipped with the Android devices we tested and were managed by Shanghai Adups Technology Co. Ltd," Kryptowire said.
These devices actively transmitted user and device information including text messages, contact lists, call history with full telephone numbers, unique device identifiers including the International Mobile Subscriber Identity (IMSI) and the International Mobile Equipment Identity (IMEI).
Adups claims to have a worldwide presence with over 700 million active users, and a market share exceeding 70 per cent across over 150 countries and regions with offices in Shanghai, Shenzhen, Beijing, Tokyo, New Delhi and Miami.
"The Adups website also stated that it produces firmware that is integrated in more than 400 leading mobile operators, semiconductor vendors, and device manufacturers spanning from wearable and mobile devices to cars and televisions," the Kryptowire statement late on Tuesday read.
Later, a lawyer for Shanghai AdUps Technologies told The New York Times that the data was not being collected for the Chinese government, stating: "This is a private company that made a mistake."
A BLU spokesperson told technology website Ars Technica that the software backdoor affected a "limited number of BLU devices" and that the "affected application has since been self-updated and the functionality verified to be no longer collecting or sending this information".
The firmware that shipped with the mobile devices and subsequent updates allowed for the remote installation of applications without the users' consent and, in some versions of the software, the transmission of fine-grained device location information, the Kryptowire statement said.
The firmware also collected and transmitted information about the use of applications installed on the monitored device, bypassed the Android permission model, executed remote commands with escalated (system) privileges, and was able to remotely reprogramme the devices.
"Our findings are based on both code and network analysis of the firmware. The user and device information was collected automatically and transmitted periodically without the users' consent or knowledge,a the global security firm noted.
The collected information was encrypted with multiple layers of encryption and then transmitted over secure web protocols to a server located in Shanghai.
This software and behaviour bypasses the detection of mobile anti-virus tools because they assume that software that ships with the device is not malware and thus, it is white-listed.
"We analysed the Personally Identifiable Information (PII) collected and transmitted in an encrypted format to servers in Shanghai, including one of the bestselling unlocked smartphones sold by major online retailers," Kryptowire added.
Kryptowire was jump-started by the US Defense Advanced Research Projects Agency (DARPA) and the Department of Homeland Security (DHS).