diff --git a/services/java/com/android/server/pm/PackageManagerService.java b/services/java/com/android/server/pm/PackageManagerService.java
index fb6e9edcbb6c2..95dc3738d0bc6 100755
--- a/services/java/com/android/server/pm/PackageManagerService.java
+++ b/services/java/com/android/server/pm/PackageManagerService.java
@@ -5566,9 +5566,9 @@ public class PackageManagerService extends IPackageManager.Stub {
                         // version of the one on the data partition, but which
                         // granted a new system permission that it didn't have
                         // before.  In this case we do want to allow the app to
-                        // now get the new permission if the new system-partition
-                        // apk is privileged to get it.
-                        if (sysPs.pkg != null && isPrivilegedApp(pkg)) {
+                        // now get the new permission if the ancestral apk is
+                        // privileged to get it.
+                        if (sysPs.pkg != null && sysPs.isPrivileged()) {
                             for (int j=0;
                                     j<sysPs.pkg.requestedPermissions.size(); j++) {
                                 if (perm.equals(
@@ -9370,7 +9370,7 @@ public class PackageManagerService extends IPackageManager.Stub {
         }
     }
 
-    boolean locationIsPrivileged(File path) {
+    static boolean locationIsPrivileged(File path) {
         try {
             final String privilegedAppDir = new File(Environment.getRootDirectory(), "priv-app")
                     .getCanonicalPath();
diff --git a/services/java/com/android/server/pm/PackageSetting.java b/services/java/com/android/server/pm/PackageSetting.java
index b6f9f5b336b07..b4478610509d3 100644
--- a/services/java/com/android/server/pm/PackageSetting.java
+++ b/services/java/com/android/server/pm/PackageSetting.java
@@ -16,6 +16,7 @@
 
 package com.android.server.pm;
 
+import android.content.pm.ApplicationInfo;
 import android.content.pm.PackageParser;
 
 import java.io.File;
@@ -56,4 +57,8 @@ final class PackageSetting extends PackageSettingBase {
     public int[] getGids() {
         return sharedUser != null ? sharedUser.gids : gids;
     }
+
+    public boolean isPrivileged() {
+        return (pkgFlags & ApplicationInfo.FLAG_PRIVILEGED) != 0;
+    }
 }
diff --git a/services/java/com/android/server/pm/Settings.java b/services/java/com/android/server/pm/Settings.java
index 92fc6a44d6d81..3b4393a894afa 100644
--- a/services/java/com/android/server/pm/Settings.java
+++ b/services/java/com/android/server/pm/Settings.java
@@ -2210,7 +2210,11 @@ final class Settings {
 
         int pkgFlags = 0;
         pkgFlags |= ApplicationInfo.FLAG_SYSTEM;
-        PackageSetting ps = new PackageSetting(name, realName, new File(codePathStr),
+        final File codePathFile = new File(codePathStr);
+        if (PackageManagerService.locationIsPrivileged(codePathFile)) {
+            pkgFlags |= ApplicationInfo.FLAG_PRIVILEGED;
+        }
+        PackageSetting ps = new PackageSetting(name, realName, codePathFile,
                 new File(resourcePathStr), nativeLibraryPathStr, versionCode, pkgFlags);
         String timeStampStr = parser.getAttributeValue(null, "ft");
         if (timeStampStr != null) {
@@ -2266,6 +2270,7 @@ final class Settings {
                 XmlUtils.skipCurrentTag(parser);
             }
         }
+
         mDisabledSysPackages.put(name, ps);
     }