What is Privilege Escalation?
Privilege escalation is a security exploit where an entity gains access to tools or capabilities beyond what was initially authorised — either by exploiting vulnerabilities (vertical) or by leveraging another entity's permissions (horizontal).
WHY IT MATTERS
In AI agent systems, privilege escalation can be subtle. An agent might convince another agent to invoke a tool on its behalf (horizontal escalation). Or it might use a permitted tool in an unintended way to achieve the effect of a denied tool (vertical escalation). Or prompt injection might cause it to bypass its own prompt-level restrictions.
Vertical escalation (gaining higher privileges) in MCP systems means an agent gaining access to tools it should not have — calling execute_command when only read_file was authorised. This could happen through tool chaining, MCP server misconfiguration, or prompt injection.
Horizontal escalation (accessing other agents' tool access) is equally dangerous in multi-agent systems. Agent A might trick Agent B into calling a tool that Agent A is not authorised to use.
HOW POLICYLAYER USES THIS
Intercept prevents tool-level privilege escalation through its fail-closed YAML policy model. Agents cannot escalate their own privileges because they cannot modify, read, or influence their own policy files. The policy is external to the agent — managed by operators, enforced by Intercept. Even if an agent is fully compromised via prompt injection, it can only invoke tools explicitly allowed in its YAML policy.