Britain launches inquiry into phone hacking

Dummies and puppets representing Prime Minister David Cameron (L) and Culture Secretary Jeremy Hunt (R) are held aloft by Rupert Murdoch at the launch of the campaign group Hacked off near Parliament on July 6, 2011 in London, England. The Prime Minister has promised that there will be a public inquiry into phone hacking carried out by journalists at The News of the World newspaper.

Kai Ryssdal: Rupert Murdoch had a very bad day in the markets today. Shares of his major investment -- that'd be his own company, News Corp -- tumbled as a long-running scandal involving one of his British newspapers broke into the open. The Sunday tabloid News of the World has been accused of snooping into the lives of ordinary and very vulnerable people. In a statement today, Murdoch called the papers actions deplorable and unacceptable.

Sadly for him, Murdoch's corporate partners are reacting that way too. From the European Desk in London, Marketplace's Stephen Beard reports.


Stephen Beard: The list of alleged victims grows longer by the day, and the alleged intrusiveness grows ever more repellent. Six years ago, Graham Foulkes learned that his young son David had died in a terrorist bombing on the London Tube. Now Graham has been told that in the days and weeks after the blast, the News of the World may have hacked into his phone, looking for juicy quotes.

Graham Foulkes: The real emotional turmoil and state that we were in, and that somebody was listening to that -- it's a violation, isn't it?

This and many other revelations triggered an emergency debate in Parliament this afternoon. Prime Minister David Cameron said if the allegations are true, they constitute a gross invasion of privacy.

David Cameron: We're talking about murder victims, potentially terrorist victims, having their phones hacked into. It is absolutely disgusting.

And illegal. The News of the World editor at the time of the worst alleged excesses was Rebekah Brooks -- now head of Murdoch's British subsidiary News International. Company spokesman Simon Greenberg says Brooks has launched a full-scale internal inquiry.

Simon Greenberg: She's now leading effectively the cleanup of the whole of the issue. She's the chief executive of this company and is determined to lead this company throughout this whole process.

Many public figures say Brooks should resign. The News of the World also felt the wrath of its advertisers. Half a dozen, including Ford, have withdrawn their business.

Max Hastings is a former newspaper editor. He says the News of the World may have got into this mess striving in a highly competitive market to maintain its role as News International's most lucrative title.

Max Hastings: There is a good deal of evidence that the News of the World has gone to fantastic and indeed appalling lengths to get the kind of stories that produce these extraordinary revenues for N.I.

News International's revenue from News of the World is now likely to decline. It's not yet clear how much damage this rapidly unfolding scandal will do to the Murdoch brand in Britain.

In London, I'm Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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