(This Oct 18 story has been refiled without any changes to the text.)

By Raphael Satter

WASHINGTON (Reuters) - A U.S. court has ordered Israel's NSO Group to stop targeting Meta Platforms' WhatsApp messaging service, a development the spyware company warned could put it out of business.

In a 25-page ruling handed down Friday, U.S. District Court Judge Phyllis Hamilton imposed a permanent injunction on NSO Group's efforts to break into WhatsApp, one of the world's most widely used communications platforms. 

Hamilton also handed NSO a significant break on the damages awarded in a recently concluded jury trial, reducing the punitive damages it owes Meta from about $167 million to $4 million. 

The injunction is likely to pose a challenge to NSO, which has for years been accused of facilitating human rights abuses through its flagship hacking tool, Pegasus. 

Pegasus takes advantage of weaknesses in commonly deployed pieces of software to power its surveillance, making WhatsApp one of its bigger targets. 

NSO has previously argued that an injunction preventing it from going after WhatsApp "would put NSO's entire enterprise at risk" and "force NSO out of business," according to the judgment.

Meta executives celebrated the decision.

"Today's ruling bans spyware maker NSO from ever targeting WhatsApp and our global users again," WhatsApp chief Will Cathcart said on X. "We applaud this decision that comes after six years of litigation to hold NSO accountable for targeting members of civil society."

NSO, which has long insisted its products fight serious crime and terrorism, said it welcomed the 97% reduction in punitive damages and said that the injunction did not apply to NSO's customers, "who will continue using the company's technology to help protect public safety."

The company said it would review the decision and "determine its next steps accordingly."

The company was recently purchased by a group led by Hollywood producer Robert Simonds, according to a report earlier this month in tech publication TechCrunch. Simonds did not immediately return an email.