NDS Group Ltd.
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NDS Group Ltd. is an Israeli encryption technology company that produced the smart cards for Sky TVs satellite channels. It was acquired by News Corporation in 1992, but in 2008 Murdoch sold majority stake to Permira, a private equity firm; News Corporation retains approximately 49% stake. Most of NDS's operations take place in Israel where 1,300 of its 5,000 employees work at the company's Jerusalem R&D center. It has also a center in Haifa and its headquarters are in Staines, UK.
Dan Sabbagh summarizes the current history of the company:
- The questions raised in Monday's programme, meanwhile, focus on alleged hacking of a different type, conducted by another News Corporation company – its pay-TV technology and security division NDS, a company borne out of Israeli encryption technology but whose headquarters is near Heathrow Airport.
NDS was almost wholly owned by News Corporation at the time ITV Digital was in operation, between 1998 and 2002, but in 2008 Rupert Murdoch sold 51% to the British venture capital firm Permira. Earlier this month, News Corp then announced the whole of NDS was to be sold to the US technology giant Cisco in a $5bn deal, although that transaction will not close. For the moment, though, James Murdoch sits on the board of NDS Group Ltd – a board he also sat on between 1998 and 2003. His brother Lachlan was also on the board between 2002 and 2005.
Hacking Scandal: UK
On 26 March 2012, a BBC Panorama documentary revealed that News Corporation used NDS to hack the smart cards for ITV Digital/On Digital, its main UK competitor. Cards and codes were made available through NDS-funded pirate operation, and as a consequence a significant number of users obtained service without paying; ITV Digital went bankrupt shortly thereafter.
On June 4th, Exaro publish the astonishing news about Scotland Yard investigation, here is a summary.
Police investigate News Corporation for 'sabotaging rival to Sky'
Rupert Murdoch's company accused of using industrial espionage to cripple competitor
Scotland Yard is investigating allegations that a subsidiary of Rupert Murdoch's News Corporation sabotaged Sky TV's biggest rival, Exaro can reveal. Detectives in the Metropolitan Police Service's "specialist crime and operations" section are assessing sensational claims that a technology firm then part-owned by News Corporation, NDS, used a computer hacker to undermine On Digital. Carlton and Granada set up On Digital in 1998, posing a threat to Sky's dominance of the UK's pay-TV market. Renamed ITV Digital three years later, it was plagued by widespread piracy and folded in 2002. 
Hacking Scandal: Australia
Haaretz reports that NDS was involved in similar tactis in Australia:
- On Wednesday, the Australian Financial Review journal published the results of an inquiry and claimed that an NDS subsidiary, called Operational Security, similarly impaired rival broadcast companies Austar, Optus and Foxtel in the late 1990s.
The Australian Financial Review states:
- A secret unit within Rupert Murdoch’s News Corporation promoted a wave of high-tech piracy in Australia that damaged Austar, Optus and Foxtel at a time when News was moving to take control of the Australian pay TV industry. The piracy cost the Australian pay TV companies up to $50 million a year and helped cripple the finances of Austar, which Foxtel is now in the process of acquiring. A four-year investigation by The Australian Financial Review has revealed a global trail of corporate dirty tricks directed against competitors by a secretive group of former policemen and intelligence officers within News Corp known as Operational Security. Their actions devastated News’s competitors, and the resulting waves of high-tech piracy assisted News to bid for pay TV businesses at reduced prices – including DirecTV in the US, Telepiu in Italy and Austar. These targets each had other commercial weaknesses quite apart from piracy.
- Murdoch's TV Pirates, BBC Panorama, 26 March 2012.
- Q&A: ITV Digital sabotage claims, BBC Online, 27 March 2012
- Dan Sabbagh, Investigation will have made interesting viewing for Ofcom's News Corp team, Guardian, 26 March 2012.
- Exaro Article, Police investigate News Corporation for 'sabotaging rival to Sky'
- Anshel Pfeffer, Israeli firm NDS accused of helping News Corp sabotage rivals, Haaretz, 29 March 2012.
- Neil Chenoweth, Pay TV piracy hits News, Australian Financial Review, 28 March 2012.