Were a writer of fiction to have created the News International scandal for a summer potboiler, he could have done no better than reality’s narrative crescendo, which built from the relatively innocuous (Hugh Grant, Sienna Miller), up through pretty bad (the aides to minor royals), and all the way to downright appalling (murdered schoolchildren, slain soldiers). What started ostensibly as a story about the typical overreach of the British tabloid press now appears to be a tale of endemic misconduct and even corruption. This morning, further accusations surfaced, with the Washington Post reporting that the News of the World may have hacked the phones of 9/11 victims, and that the Murdoch-owned Times went after former prime minister Gordon Brown’s “bank account, legal file and family medical records.” To stretch the analogy employed in previous reports, David Cameron will now need something stronger than an Advil.
Precisely what will be the fallout from these new allegations remains to be seen. It is unlikely that all of News International’s British newspapers will be shuttered as was the News of the World on Sunday. But this development may well end the proposed News Corporation takeover of BSkyB, at least in its current form. News Corporation confirmed today that they were withdrawing their offer to spin-off Sky News, and Culture Secretary Jeremy Hunt — who has been charged with overseeing the takeover — confirmed as a result that he will be referring the transaction to the Competition Commission.
The BBC reports that Hunt “said the Competition Commission would ‘consider media plurality, just as I was,’ and would not look at broader issues,” but it is doubtful that, when considering the implications of News Corporation expanding their share of the British media market, the recent allegations will be ignored entirely. Indeed, Hunt appeared to contradict himself in a speech to the House of Commons this afternoon, suggesting that the referral “will mean that the Competition Commission will be able to give further full and exhaustive consideration to this merger, taking into account all relevant recent developments.” Cynics will argue that Rupert Murdoch has deliberately forced a referral which he knows he cannot win, in order to save face and avoid having to withdraw his takeover bid.
Murdoch has long been unpopular in the United Kingdom, hitherto on the basis of little more than his success. So his critics will undoubtedly be delighted to see that, as a result of the news of the past week, shares in News Corporation have tumbled. The Guardian reports that just today the shares have taken another 7 percent fall. They may well bounce back, but it is almost certain that the stranglehold that News International newspapers have had over successive British governments will never again reach such lofty heights. If, as the Daily Mail suggests, the Murdoch press was simply too powerful to say no to before this week, this scandal has turned the arrangement on its head.