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U.K. parliament debates tabloid hacking claims

Rebekah Brooks, CEO of News International.

STEVE CHIOTAKIS: Today, the British parliament holds an emergency three-hour debate on accusations that employees of the newspaper 'News of the World' hacked into people's cell phones. Global media titan Rupert Murdoch owns the paper. He also owns the Wall Street Journal and Fox TV here in the U.S. and a whole host of other media properties around the world, from Canada to his homeland Australia.

Marketplace's Stephen Beard is with us live from London to walk us through this story -- a very complicated one. Hi Stephen.

STEPHEN BEARD: Hello Steve.

CHIOTAKIS: Talk about the phone hacking. What exactly is phone hacking?

BEARD: It's calling someone's cellphone, getting their password and listening to their messages. And it's alleged that News of the World did this to the cellphone of a missing 13-year-old girl who it later turned out had been murdered. News of the World hacked into her phone so they could report on the case and it's alleged they actually deleted some messages on her phone to make room for more. This has caused a wave of revulsion here because this gave the parents the false hopes that their daughter might still be alive. And there have now been numerous other allegations suggesting phone hacking on an industrial scale by the News of the World.

CHIOTAKIS: What impact, Stephen, is this having on Murdoch and his dominance in the newspaper business there?

BEARD: Well, this is an immensely powerful media group. It's got 40 percent of the British press. It runs the country's biggest commercial TV broadcaster. The problem is the editor at the News of the World at the time of the most damaging allege incident was Rebekah Brooks, who is now the head of News International and one of Murdoch's most trusted executives. There have been widespread calls for her to resign.

Simon Greenberg of News International says Rebekah Brooks won't resign. But she has launched a full internal inquiery.

SIMON GREENBERG: She's absolutely determined to get to the bottom of this issue. We are under no illusions that she is absolutely determined that things went wrong, that we will correct them and that justice will be done.

There are likely to be renewed calls for her head, however, during today's parliamentary debate on the issue. A very tricky subject this, for both the government and the opposition. Both main parties have cozied up to Rupert Murdoch because it's claimed they feel they need his newspapers support if they want to get elected.

CHIOTAKIS: So a balancing act there. Stephen. Any kind of financial damages yet?

BEARD: Yes, Ford has said it will no longer advertize in the New of the World. A number of other big advertisers say they are "reviewing the situation." And there's a campaign on the way on Twitter and Facebook urging all advertisers to boycott the paper.

CHIOTAKIS: All right. Marketplace's Stephen Beard -- an interesting story -- reporting from London for us this morning. Stephen, thank yup.

BEARD: OK Steve.

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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