Thursday, July 21, 2011

US looks into alleged hacking by News Corp.'s ad arm

http://www.msnbc.msn.com/id/43847056/ns/us_news-life/

By Michael Isikoff
7/21/2011

Justice Department prosecutors are reviewing allegations that News Corp.’s advertising arm repeatedly hacked into the computers of a competitor in the United States as part of an effort to steal the rival firm’s business, according to a lawyer for the company.

Bill Isaacson, the lawyer for Floorgraphics, a New Jersey-based advertising firm, told NBC News he was contacted this week by two federal prosecutors and an FBI agent based in New York seeking information about claims that the firm’s computers were hacked by News America Marketing, the advertising division of Rupert Murdoch’s News Corp., seven years ago.

The allegations were first reported to the FBI in 2004 and prompted investigations at the time by the bureau, the Secret Service and the New Jersey Division of Criminal Justice, according to documents obtained by NBC News and congressional correspondence.

While never prosecuted, the claims became a key part of a civil lawsuit that Floorgraphics filed against News America. The case was resolved six days into a 2009 trial, when News America agreed to buy Floorgraphics' assets for $29.5 million as part of an out-of-court settlement.

[.....]

The lawsuit wasn’t the only one that News America has settled. On the eve of trial last year, News America agreed to pay $500 million to Valassis Communications, another advertising company that accused it of anti-competitive behavior. In a statement at the time, Chase Carey, News Corp.’s deputy chairman, said: “It has become evident to our legal advisers from pre-trial proceedings over the past couple of weeks that significant risks were developing in presenting this case to a jury.”

This year, one day into a civil trial, News America agreed to pay $125 million to Insignia Systems, another rival firm that accused it of violating anti-trust laws and engaging in anti-competitive behavior.

Although the Valassis and Insignia cases involved similar claims of anti-competitive behavior, they did not involve allegations of computer hacking.

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