Tabloid Hacking Scandal Probed

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Once upon a time the scare was about ?Big Brother? but no body would have ever guessed that they would be weary of journalists.

This is referring to the phone hacking which apparently conducted by Murdoch?s News of the World paper.

In a recent move, U.K. Prime Minister David Cameron told Parliament that investigations will be launched into issues surrounding the hacking of mobile-phone voice mails by News Corp’s News of the World tabloid.

The growing criticism comes as the long-running scandal over dubious reporting tactics by News of the World took was amplified this week with the allegation that, in 2002, the tabloid hacked into the voice mail of a missing 13-year-old girl who later turned out to be murdered.

The list of potential victims also grew. Revelations emerged Wednesday that the phones of relatives of people killed in the July 7, 2005, terrorist attacks on London’s transit system, as well as those tied to two more slain schoolgirls, may also have been targeted.

The focal point is the News of the World – now facing a spreading advertising boycott – and the top executives of its parent companies: Rebekah Brooks, chief executive of News International, and her boss, media potentate Rupert Murdoch.

In his first comment since the scandal broke, Murdoch said in a statement Wednesday that Brooks would continue to lead his British newspaper operation despite calls for her resignation.

The scandal, which has already touched the office of the Prime Minister, widened as the Metropolitan Police confirmed they were investigating evidence from News International that the tabloid made illegal payments to police officers in its quest for information.

The true extent of the hacking is not yet clear – and may not be known for months as inquiries unfold.

The scandal dominated U.K. media coverage and continued to snowball late Wednesday with a report in the Daily Telegraph claiming that relatives of soldiers killed in Iraq may have had their phones hacked. News International said it would be “absolutely appalled and horrified” if there was any truth to the allegations. The Ministry of Defense declined to comment, saying it was a matter for the Metropolitan Police.

Advertising boycott

Virgin Holidays canceled several ads due to run in the Sunday newspaper this week. Mumsnet – a popular online community for mothers – removed ads from Murdoch broadcaster Sky after its members complained about the tabloid hacking.

Car maker Vauxhall, part of?General Motors?Co., said it would suspend advertising in the paper until the outcome of a police investigation, following a similar move by?Ford Motor?Co. Several other advertisers said they are reviewing the situation.

Still, several major advertisers said they are considering their positions, including?Vodafone GroupPLC; mobile operator Everything Everywhere, owned by Deutsche Telekom AG and?France Telecom?SA;; and utility Npower, the U.K. business of German utility?RWE?AG.

The News of the World is owned by News International, the U.K.newspaper division of News Corp., which also owns The Wall Street Journal. In Wednesday trading, News Corp. stock slid 5.5% to $17.15 on the Nasdaq stock market.

For now, however, the heat is most squarely on News Corp. and its News of the World title, where advertiser pressure is building.

Sources: WSJ, sfgate

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