Pressure mounts on Murdoch empire
Rupert Murdoch's News Corp. has withdrawn its bid for British satellite broadcaster BSkyB in the wake of the growing scandal over newspaper phone-hacking, the company announced yesterday.
The announcement came shortly before Britain's House of Commons was to debate a government-backed motion calling on Murdoch to halt his attempt to acquire the 61-percent of BSkyB his company does not already own.
"We believed that the proposed acquisition of BSkyB by News Corporation would benefit both companies but it has become clear that it is too difficult to progress in this climate," said Chase Carey, deputy chairman, president and chief operating officer of News Corp. in a statement.
"News Corporation remains a committed long-term shareholder in BSkyB. We are proud of the success it has achieved and our contribution to it."
Pressure seems to mount on Murdoch from all fronts as the phone-hacking scandal rocking his media empire threatened to spill over to the United States.
Earlier, in a rare show of unity in parliament against the one-time kingmaker of British politics, the coalition government looked set to back an opposition motion urging Murdoch to withdraw his bid for control of the broadcaster.
In the United States, Senate Commerce Committee Chairman Jay Rockefeller warned Tuesday of "severe" consequences if it was found that the phone-hacking scandal rocking Murdoch's realm had spread to his US operations.
"I encourage the appropriate agencies to investigate to ensure that Americans have not had their privacy violated," the Democrat said in a statement.
"I am concerned that the admitted phone hacking in London by the News Corp. may have extended to 9/11 victims or other Americans. If they did, the consequences will be severe."
British Prime Minister David Cameron yesterday announced details of the two inquiries he had promised into the long-running phone hacking row.
Giving details for the first time since he announced the inquiry last week, he said it would cover "the culture, practices and ethics of the press, their relationship with the police, the failure of the current system of regulation."
Cameron said the inquiry, led by Lord Justice Brian Leveson, would have the power to summon "newspaper reporters, management, proprietors, policemen and politicians of all parties to give evidence under oath and in public."
The inquiry would report in one year, he said.
Anyone involved in the scandal should be barred from British media ownership, said Cameron.
After Cameron's statement, lawmakers were to debate the motion introduced by Ed Miliband, leader of the main opposition Labour party, asking Murdoch to withdraw his BSkyB bid "in the public interest".
Murdoch flew to London on Sunday to take control of the crisis, and lawmakers have invited him, his son James and his top British executive to give evidence on phone hacking and allegations that News International papers paid police for information.
Meanwhile Murdoch's British newspaper arm strongly rejected claims by former British prime minister Gordon Brown that it had hired "criminals" to access his private information.
The Sun tabloid fought back against claims it used illegal methods to break the news of Brown's son Fraser's cystic fibrosis, splashing the headline "Brown wrong -- We didn't probe son's medical records" across its front page.
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