How Rupert Murdoch Competes

Simply put, he cheats:

Part of Rupert Murdoch's News Corporation empire employed computer hacking to undermine the business of its chief TV rival in Britain, according to evidence due to be broadcast by BBC1's Panorama programme on Monday.

...The witnesses allege a software company NDS, owned by News Corp, cracked the smart card codes of rival company ONdigital. ONdigital, owned by the ITV companies Granada and Carlton, eventually went under amid a welter of counterfeiting by pirates, leaving the immensely lucrative pay-TV field clear for Sky.

The allegations, if proved, cast further doubt on whether News Corp meets the "fit and proper" test required to run a broadcaster in Britain.

...Panorama's emails appear to state that ONdigital's secret codes were first cracked by NDS, and then subsequently publicised by the pirate website, called The House of Ill Compute – THOIC for short. According to the programme, the codes were passed to NDS's head of UK security, Ray Adams, a former police officer. NDS made smart cards for Sky. NDS was jointly funded by Sky, which says it never ran NDS.

...He says Adams sent him the ONdigital codes so that other pirates could use them to manufacture thousands of counterfeit smart cards, giving viewers illicit free access to ONdigital, then Sky's chief business rival.

Gibling says he and another NDS employee later destroyed much of the computer evidence with a sledgehammer. After that NDS continued to send him money, he says, until the end of 2008, when he was given a severance payment of £15,000 with a confidentiality clause attached.

...Gibling says that when fellow pirates found out in 2002 that he was being secretly funded by NDS, THOIC was hastily closed down and he was told by Adams's security unit to make himself scarce.

"We sledgehammered all the hard drives." He says he was told to go into hiding abroad.

...In 2002 Canal Plus, which supplied ONdigital with its smart card system, sued NDS in a US Court, alleging that NDS had hacked its codes. But no evidence about a link to ONdigital emerged: the case was dropped following a business deal under which Murdoch agreed to purchase some of Canal Plus's assets.