Deep-packet inspection is the one of the most invasive things a country can do to its internet. Employed by repressive regimes from Russia to Bahrain, it lets governments look into the content of web traffic as it moves over the network, allowing them to censor websites in real time and conduct detailed surveillance of citizen's activities on the web. They also require sophisticated equipment, usually provided by a western company. As a result, DPI installations are usually kept secret for as long as possible.
Encryption systems like Tor can still be used to hide traffic from the system
But sometimes, they can't. A Buzzfeed report seems to have caught the Egyptian government in the act, confirming that the country is currently installing a new DPI system with a company called See Egypt, which Buzzfeed identifies as a sister company to the American Blue Coat. Blue Coat got in trouble a few years ago for selling a similar system to Syria, which launched a subsequent State Department investigation.
Counter to Buzzfeed's report, Blue Coat denies any direct connection to the Egyptian installation. "See Egypt is a Blue Coat reseller, but is not otherwise affiliated with Blue Coat," the company said in a statement. "See Egypt has assured us that they have not bid or resold Blue Coat products to the Egyptian government for any social network monitoring operation."
The Egyptian system is capable of monitoring conversations on most chat apps, including Skype, WhatsApp, and Viber. That capability is particualrly important given the central role chat programs played in the country's Arab Spring protests. According to an official in the Egyptian government, the system will be used to monitor Islamist political activity and anyone taking part in "debauchery" or "homosexual acts." For those living in Egypt, encryption programs like the Tor Browser and Chatsecure can still hide traffic from the system when used properly.
9/18/14 2:56pm ET: Updated to include a statement from Blue Coat.