News Corp. accused of Australian piracy plot

Rupert Murdoch's News Corp. Wednesday faced a fresh barrage of allegations over its conduct, with an Australian newspaper claiming it had a secret unit that promoted pirating of pay-TV rivals. The Australian Financial Review said the company sabotaged its competitors by promoting high-tech piracy that damaged Austar and Optus at a time when News was moving to take control of the Australian pay-TV industry. The newspaper, which belongs to News rival Fairfax, said the evidence emerged during a four-year investigation, as it began releasing 14,000 emails concerning one of the group's security subsidiaries. It comes after the BBC's Panorama programme on Monday made similar charges against the company in Britain. The new allegations come as News Corp. is embroiled in a phone-hacking scandal in Britain that saw the company shut down its mass-selling News of the World tabloid. The Australian Financial Review claimed a secret unit of former policemen and intelligence officers within News known as "Operational Security" crippled the finances of competitors such as Austar and Optus. They did so by cracking the codes of smart cards issued to customers of the services and then selling them on the black market, giving viewers free access and costing the broadcasters millions of dollars, it said. Austar is currently the subject of a takeover bid by Foxtel, which is part-owned by News Corp. The unit was reportedly headed by Reuben Hasak, a former deputy director of the Israeli domestic secret service Shin Bet, and established in the mid-1990s within News subsidiary NDS. The emails reportedly came from the hard drive of a former security chief at NDS, which was originally set up to tackle internal fraud. But documents uncovered by the newspaper allegedly reveal that NDS began hunting the pirates targeting News' own operations. In doing so, they began encouraging and facilitating piracy by hackers not only of its competitors but also of companies for whom NDS provided pay-TV smart cards. The documents reportedly show that NDS sabotaged business rivals, fabricated legal actions and obtained telephone records illegally. In the BBC programme, NDS was accused of leaking information from British broadcaster On Digital, a rival to News's BSkyB, which could be used to create counterfeit smart cards, giving people free access to cable television. NDS rejected those claims and News Corp. has consistently denied any role in fostering piracy in pay television.