Rupert Murdoch's News Corp has been accused of using high-tech piracy in Australia to sabotage the rival pay-TV channels, according to a report by the Australian Financial Review. News Corp promoted piracy to sabotage its competitors through its secretive group of former policemen and intelligence officers within the company known as Operational Security in the mid-1990's, the report alleged.
The report is based on a four-year investigation the Australian Financial Review claims to have conducted based on 14,000 emails it had accessed which are believed to be from the hard drive of a former head of security, Ray Adams.
Adams was the head of NDS in Europe, a former News Corp subsidiary, from 1996 to 2002.
NDS was originally set up to look into piracy issues in Murdoch's own operations, according to the newspaper. Later it turned into a dirty tricks campaign and News Corp could take over competitors like DirecTV in the United States and Telepiu in Italy at reduced prices.
The emails reveal that the NDS took the services of computer hackers to work with its operational security officers to get the smartcard passwords of pay-TV channels such as Austar, Optus and Foxtel.
News Corp is accused of selling the smartcards in the black market enabling customers to use them free of charge, thereby causing loss of millions of dollars to Australian channels.
According to the Financial Review, the move cost the pay-TV channels up to $50 million annually and pushed Austar into financial turmoil, which is currently going through the process of takeover by Foxtel. News Corp owns a 25 per cent stake in Foxtel.
The Financial Review also points out that accessed emails support the allegations raised in a BBC Panorama documentary which was aired on Monday that News Corp sought to derail OnDigital, a Pay TV rival to its BSkyB in the UK.
News Corp has denied any involvement in the allegations, said the Financial Review.