PM – News Ltd accused of encouraging piracy 28/03/2012
NEIL CHENOWETH: It’s a huge business. I mean if you have a million pirates on your system as, in fact, one of News Corp’s clients did in the United States, it’s going to be costing you $500 million per year. It can really destroy a pay TV platform.
So News Corp starts off with this major problem that its own security has been hacked. In 1996 they set up an operational security unit. It’s run by the former deputy head of the Israeli secret service, Shin Bet, and it employs a whole bunch of former intelligence officers and policeman. And initially the object is just to crack down on piracy. And it’s an entirely good and reasonable step to take.
MATT PEACOCK: But what you say it then became was a unit that sabotaged business rivals, fabricated legal actions and obtained telephone records illegally, amongst other things.
NEIL CHENOWETH: Sure, Larson off Far Side has a cartoon where you’ve got two bears and a sniper rifle scope and one bear is pointing – the one with the cross hairs on his chest – is pointing to the other guy and saying ‘shoot him.’
One of the defences that News and NDS, their Israeli arm, found they had was, if pirates could attack their competitors rather than themselves. And they developed a strategy that had two stages. The first was they set up a reverse engineering black-hat team in a laboratory in Haifa. And that reverse engineered the smart cards of all of the major rival companies that they had.
And it’s quite normal for companies to do that. However, what happened soon afterwards was that copies of this software appeared on pirate websites around the world. And it’s this that caused incalculable damages to these companies. Because once the code for your microchips, your smart card has been exposed, it’s open season for you.
MATT PEACOCK: Well News Corporation denies that it’s actually done anything illegal, that it hasn’t spread these pirate codes around for its competitors to destroy them. You’re saying they have and you’ve been leaked a treasure trove of emails to prove it, is that correct?
NEIL CHENOWETH: Yes, they’ve been sued by almost every major satellite pay TV company in the world from Echo Star and DirecTV in the United States to Canal Plus throughout Europe; Sogecable in Spain, and they’ve emerged unscathed from this. And they’ll say we have been completely vindicated, the courts have upheld where we are.
What we found in this trove of emails from one of the senior people, a former commander in Scotland Yard, has been that – it paints a completely different story. It shows them liaising with hackers, promoting piracy, arranging for pirates to get the material that they need to complete their hacks.
And you see this picture in Australia where they’re anxious that their technology take over form their competitor. And you see them manipulating hackers here, encouraging them, protecting them from being discovered, providing them with the material – the cards, the software – that they need to target Austar.