WASHINGTON, May 6 (Reuters) -

Meta Platforms ( META ) won a $168 million verdict against the

Israeli surveillance firm NSO, the company said Tuesday, capping

a six-year arm wrestling match between America's biggest social

networking platform and the world's best known spyware company.

Meta had already won a December ruling finding that NSO had

unlawfully exploited a bug in its messaging service WhatsApp to

plant spy software on its users' phones. On Tuesday, a jury in

California ruled that NSO owed Meta $444,719 in compensatory

damages - and $167.3 million in punitive damages, Meta said.

"Today's verdict in WhatsApp's case is an important step

forward for privacy and security as the first victory against

the development and use of illegal spyware that threatens the

safety and privacy of everyone," Meta said in a statement.

In its statement, NSO said it would "carefully examine

the verdict's details and pursue appropriate legal remedies,

including further proceedings and an appeal."

NSO, an Israeli firm that first drew global attention in

2016, has become "a poster child for the surveillance industry

and their abuses and impunity," said Natalia Krapiva, a senior

lawyer with the human rights group Access Now. NSO has long

argued that its software is used to track terrorists and

pedophiles, but the firm has been implicated in abusive

surveillance in countries around the world, including Saudi

Arabia, Spain, Mexico, Poland, and El Salvador.

WhatsApp's lawsuit - which was filed in 2019 and at one

point made its way to the Supreme Court - has been closely

followed both by NSO's competitors in the surveillance

technology space and by human rights advocates critical of the

industry.

Victims of state-backed hacking have struggled to hold

suppliers of spy software accountable for what their customers

do with their tools, while hacking firms have long worried that

their products could draw legal sanctions. The WhatsApp verdict

was a sign that both outcomes were possible, said Krapiva.

"This is something that will hopefully show spyware

companies that there will be consequences if you are careless,

if you are brazen, and if you act in such a way as NSO did in

these cases," she said.

Beyond sending a message to spyware merchants, the case also

pulled back the curtain - ever so slightly - on the inner

workings of NSO itself.

The court heard about NSO's 140 person-strong research team,

whose $50 million budget was in part devoted to exploiting

security vulnerabilities in smartphones. An attorney for the

company disclosed that its customers included Uzbekistan, Saudi

Arabia, and Mexico - rare on-the-record names from NSO's closely

guarded client list.

Much about the spyware company's targets and clients remains

unknown, in part because the firm refused to hand over evidence.

In her December ruling, District Judge Phyllis Hamilton accused

NSO of having "repeatedly failed to produce relevant discovery

and failed to obey court orders regarding such discovery." The

Guardian newspaper reported last year that Israeli officials had

seized documents from NSO in an effort to prevent the files from

making their way to U.S. court.

"This whole case is shrouded in so much secrecy," Hamilton

said during the trial. "There's so much that's not known."