Tuesday. 22 July 2014

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Police investigate News Corporation for ‘sabotaging rival to Sky’

Rupert Murdoch’s company accused of using industrial espionage to cripple competitor

They delivered the actual software to be able to do this, with prior instructions that it should go to the widest possible community

Lee Gibling, computer hacker

Scotland Yard is investigating allegations that a subsidiary of Rupert Murdoch’s News Corporation sabotaged Sky TV’s biggest rival, Exaro can reveal.

Detectives in the Metropolitan Police Service’s “specialist crime and operations” section are assessing sensational claims that a technology firm then part-owned by News Corporation, NDS, used a computer hacker to undermine On Digital.

Carlton and Granada set up On Digital in 1998, posing a threat to Sky’s dominance of the UK’s pay-TV market. Renamed ITV Digital three years later, it was plagued by widespread piracy and folded in 2002.

Exaro has established that detectives have contacted senior executives at ITV as part of their enquiries, which come as News Corporation’s newspaper publishing arm in the UK is embroiled in separate police investigations into phone hacking and the bribing of public officials.

The development is bound to rock News Corporation, which is listed on stock exchanges in New York, London and Australia.

News Corporation, which owns 39 per cent of Sky, is due to be split into one entity for newspaper and book publishing, and another for television and movie companies. The move is aimed at protecting the latter from the toxic effects of phone hacking and bribery.

But the disclosure that News Corporation is under police investigation over its television interests marks a setback for the company and Murdoch, who controls it.

The allegations of industrial espionage were made last year by a self-confessed hacker, Lee Gibling, who claimed that he had been paid to publicise codes that enabled viewers to bypass encryption technology and watch On Digital for free.

BBC1’s Panorama interviewed Gibling for an edition called, Murdoch’s TV Pirates, featuring internal NDS documents.

Although On Digital was blighted by questionable commercial judgement and poor reception, ITV Digital’s former chief technical officer, Simon Dore, claimed that piracy was “the killer blow for the business”.

News Corporation and Murdoch, its chairman and chief executive, together with NDS, denied any wrongdoing and accused the BBC of muck-raking.

Scotland Yard disclosed the existence of its investigation to Tom Watson, the Labour MP who has been the scourge of Murdoch’s News International over phone hacking. Watson wrote to the Met commissioner, Sir Bernard Hogan-Howe, in March to ask the police to investigate the allegations raised in Panorama.

In a reply sent only last month, a detective from the Met’s “special enquiry team” told Watson that officers were continuing to assess “allegations of crime against NDS”.

He also disclosed that officers had contacted several relevant parties, including representatives of ITV.

He added that although he could not comment further at this stage, enquiries were ongoing and were “being progressed.”

Watson told Exaro: “There are thousands of encrypted e-mails that may reveal the extent of the relationship between former Metropolitan police officers, technologists working for Murdoch’s companies and computer-piracy specialists.”

Gibling claimed that he was paid to publish stolen information, which could be used to make counterfeit smart-cards to provide free access to On Digital.

He told Panorama: “They delivered the actual software to be able to do this, with prior instructions that it should go to the widest possible community.” He published the material on a website called, The House of Ill-Compute or Thoic.

News Corporation’s chief operating officer, Chase Carey, condemned “the BBC’s inaccurate claims”.

In a statement, he said: “The BBC’s Panorama programme was a gross misrepresentation of NDS’s role as a high quality and leading provider of technology and services to the pay-TV industry.

“Panorama presented manipulated and mis-characterised e-mails to produce unfair and baseless accusations.”

NDS, which is no longer owned by News Corporation, said in a statement at the time: “It is simply not true that NDS used the Thoic website to sabotage the commercial interests of On Digital / ITV digital or indeed any rival.”

“It is wrong to claim that NDS has ever been in possession of any codes for the purpose of promoting hacking or piracy.”

The US Department of Justice, and American courts had “rejected allegations” that NDS facilitated TV piracy.

Murdoch obliquely denied the allegations. “Seems every competitor and enemy piling on with lies and libels,” he said in a tweet.

Exaro was awaiting reaction from News Corporation at the time of publication.

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