BlackBerry Ltd (NASDAQ:BBRY) Security Backdoor Exposed?

The integrity of BlackBerry Ltd (NASDAQ:BBRY)’s encryption system for consumer data has been called to question. Court documents relating to a crime syndicate show that Canadian police accessed BlackBerry’s master encryption keys used to secure consumer data. But it is far from clear at this juncture whether the company willfully turned over the keys to the authorities or was compelled to do so or whether the law enforcement agency found its own way to obtain the master keys.

BlackBerry Ltd (NASDAQ:BBRY) doesn’t disclose how many data requests it receives from governments. Tech companies such as Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) do so in what has come to be known as transparency reporting.

BlackBerry assisted the break-in

It is not exactly clear how the interception of BlackBerry’s secure messaging system happened, but the court documents leave no doubt that the company facilitated police access to its platform. The documents show that BlackBerry and wireless network operator Rogers cooperated with the police in the investigations.

Nevertheless, as to whether BlackBerry gave police access to its master keys or the police used a third-party to break into BlackBerry’s messaging system remains unknown because the court documents are redacted.

When it happened

It is said that the Canadian police had BlackBerry Ltd (NASDAQ:BBRY)’s master encryption keys between 2010 and 2012. The police may have accessed more than a million messages during the period they had the keys. The decryption of BlackBerry’s messaging system happed at a time when the company still held a sizable share of the smartphone market.

Enterprise untouched

It seems the target was limited to BlackBerry’s consumer messages because the court documents don’t give a hint that enterprise messaging systems were also penetrated. BlackBerry doesn’t have access to the individual servers used by its enterprise customers and that means that the police would not have come to it to open the systems.

Impact on reputation

Device security is a major selling point for BlackBerry Ltd (NASDAQ:BBRY) in the smartphone market. Therefore, if its system can be seen to be vulnerable to government surveillance, the company could lose a key competitive advantage.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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