Android 4.3 comes with SE Android to improve the security of applications and data.
SELinux -- the SE stands for "security enhanced" -- was developed for Linux servers by the National Security Agency (NSA) and the open source company Red Hat Inc. The purpose of SELinux is to provide kernel-level security that can be used as an application-level firewall. It was developed as a system of mandatory access control (MAC) to enhance security on Linux servers.
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Default security in Android is based on discretionary access control mechanisms, which means that access to data is granted if the owner or creator of the data has given permission for other apps or users to interact with it. But some processes or an administrative user account can overrule discretionary access. With MAC, access to data is enforced from the kernel, so even an administrator's privileges can be restricted to certain data on an Android device.
With reference to the mobile operating system, SELinux is referred to as SE Android. It makes sure that applications are working securely in isolated environments; it comes with a policy that defines which actions an application is allowed to take, and the policy denies all other actions.
SE Android greatly enhances Android security, because running an application in such a confined environment prevents unbridled access to private data. It can stop data leaking from apps and make sure applications cannot bypass security features or escalate privileges. The basic building block for SE Android is that every object on an Android device has a security context or a label that defines what the object is used for. For instance, a Web server is labeled as such, and the SE Android policy allows the device only to access files that are labeled for access by a Web server process.
The SE Android policy contains thousands of rules that define which source context is allowed access to which target context, and developing such a policy is a lot of work. That's why SE Android is available in Android 4.3, but isn't enabled by default. In later versions of Android, once the NSA and Red Hat have completed the policy, SE Android will likely be enabled by default and come with utilities that allow systems administrators to manage the security properties that are defined in the SE Android policy.