So I asked why we shouldn’t assume there wasn’t hacking at any of Rupert Murdoch’s U.S. holdings — say, the New York Post — and lo and behold, it turns out they were accused of doing just that, settling two lawsuits just before they went to trial:
In 2009, a federal case in New Jersey brought by a company called Floorgraphics went to trial, accusing News America of, wait for it, hacking its way into Floorgraphics’s password protected computer system.
The complaint summed up the ethos of News America nicely, saying it had “illegally accessed plaintiff’s computer system and obtained proprietary information” and “disseminated false, misleading and malicious information about the plaintiff.”
The complaint stated that the breach was traced to an I.P. address registered to News America and that after the break-in, Floorgraphics lost contracts from Safeway, Winn-Dixie and Piggly Wiggly.
Much of the lawsuit was based on the testimony of Robert Emmel, a former News America executive who had become a whistle-blower. After a few days of testimony, the News Corporation had heard enough. It settled with Floorgraphics for $29.5 million and then, days later, bought it, even though it reportedly had sales of less than $1 million.
But the problems continued, and keeping a lid on News America turned out to be a busy and expensive exercise. At the beginning of this year, it paid out $125 million to Insignia Systems to settle allegations of anticompetitive behavior and violations of antitrust laws. And in the most costly payout, it spent half a billion dollars in 2010 on another settlement, just days before the case was scheduled to go to trial. The plaintiff, Valassis Communications, had already won a $300 million verdict in Michigan, but dropped the lawsuit in exchange for $500 million and an agreement to cooperate on certain ventures going forward.
And who was the head of News America at this time? None other than Paul V. Carlucci: the man who is today publisher of the New York Post.