The Chinese smartphone maker reportedly made $4.2 million through manufacturing malware-infected phones.
Chinese mobile phones are generally considered unreliable when it comes to data privacy. A majority of the mainstream Chinese phone makers have been under the governments’ radar for years. However, what Gionee did was not just unethical but also illegal, as per the court.
Reportedly, a court in China found Gionee’s subsidiary guilty of intentionally installing malware on millions of smartphones. The company knowingly infected nearly 21.75 million devices with Trojan Horse.
The malware was installed between Dec 2018 and Oct 2019 in which the company used a fake app called “Story Lock Screen” to infect the devices in order to make a profit via illegal means such as displaying unsolicited ads.
The court charged the defendant Shenzhen Zhipu Technology Co. Ltd, and defendants Zhu Ying, Xu Li, Jia Zhengqiang, and Pan Qi for modifying the computer information systems. They all received 200,000 Yuan in fines and 3 to 3.5 years imprisonment.
According to the court documents, Gionee’s subsidiary Shenzhen Zhipu Technology Co. Ltd implanted the malware via a software update, which is automatically updated on the infected smartphones through the Pull method.
Furthermore, the company used a program called “Dark Horse” for the installation and updating of the malware on the affected Gionee phones. They earned up to $4.2 million in profit.
According to the Chinese language IT news website cnBeta, Court further revealed that Beijing Baice along with Shenzhen Zhipu carried out the Pull method more than 2.88 billion times and by April 2019, their monthly profiting activity included over 21 million devices, most of which were made by Gionee (around 26,519,921 devices).
Shenzhen Zhipu Technology Co., Ltd. is Shenzhen Gionee Communication Equipment Co., Ltd.’s subsidiary and Gionee holds around 85% of its shares. Its business scope includes computer software technology development, using information networks for game products operations, and advertising business. Xu Li is its legal representative, and the company’s registered capital is approx. 10 million Yuan.
Nevertheless, this is not the first time Gionee was caught using malware against unsuspecting users. In 2014, German media reported that the company was delivering smartphones and tablets with pre-installed malware and viruses.