Feds Investigate NewsCorp Unit Over Digital Piracy Charges

09 October 2002

Accusations of digital-TV piracy continue to haunt News Corporation software unit NDS Group, with news that the American Justice Department has decided to investigate the case.

Last week, NDS Americas was served with 31 subpoenas for documents by the US Attorney’s office in San Diego. The UK-headquartered firm, 80%-owned by NewsCorp, manufactures smart cards for set-top boxes, allowing dTV broadcasts to be decoded by subscribers.

NDS’s business practices have been in the spotlight since Canal Plus Group, a unit of Vivendi Universal, launched legal action against it earlier this year [WAMN: 12-Mar-02]. The suit alleged that NDS set out to crack the software code in smart cards manufactured by CPG then passed the information on to internet hackers, prompting a wave of counterfeit cards.

That lawsuit has been suspended as part of the sale of Vivendi’s Italian unit Telepiu to NewsCorp. However, US satellite-TV company EchoStar recently filed an action of its own, also alleging its software was pirated with help from NDS [WAMN: 01-Oct-02].

NDS denies any wrongdoing, claiming it is the victim of a smear campaign by its rivals. It said it would co-operate fully with the Justice Department’s investigation.

Data sourced from: Washington Post Online; additional content by WARC staff