News Corp. faces new hacking allegations involving pay TV

A software division of News Corp. is accused of trying to bump off rival pay-TV services by hacking their smartcodes and enabling the public to view the competitors' transmissions for free.

Greg Sandoval/CNET

With a phone-hacking scandal still hanging over the head of News Corp. in Britain, Rupert Murdoch's international conglomerate is facing new hacking allegations in Australia.

According to the Australian Financial Review, e-mails and internal documents allegedly show that a "secret unit" inside News Corp. committed acts of corporate espionage against rival pay-TV services that may have resulted in the collapse of one company.

As part of the proof presented by the paper, editors there have posted to the Web more than 14,400 internal documents belonging to News Corp.

If the allegations prove true, News Corp. would face a second significant scandal. The company's reputation has already been tarnished when it was revealed last year that reporters at News Corp.-owned News of The World hacked into the voice mail of scores of public workers, celebrities, and Milly Dowler, a teenage girl who had been kidnapped and murdered.

The new allegations involves a unit within the News Corp.-owned NDS, which is accused of hiring hackers to crack smartcard codes issued by rivals of News Corp.'s pay-TV service. Smartcards are the equivalent to pass keys. They are inserted into set-top boxes and decrypt the broadcast signals.

The hackers allegedly distributed the codes over the Web so viewers could access their competitors' transmissions without paying.

One company is said to have been driven out of business as a result. News Corp. and NDS, which was acquired recently by Cisco Systems, have issued denials of wrongdoing. The newspaper reported that Australia's federal police have launched an investigation.

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