Implications of Phone Hacking Scandal

Implications Of Phone Hacking For The Media, The Government And Other Businesses In The UK Phone Hacking - Background Phone hacking is an on-going controversy surrounding New Corporation, it’s subsidiary News International and its newspaper, News of the World.

• Phone hacking reportedly begun in 1998, with the first allegations been made in 2006, and the first major investigation in 2011.

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• Over 4000 potential victims, including members of the Royal Family, the family of murdered schoolgirl Milly Dowler, Gerry and Kate McCann as well as celebrities like Hugh Grant.

Implications – The Media

• News of the World closed down in July 2011 ending its 150 year existence.
• YouGov poll found that 58% of British people have lost trust in the papers since the scandal.
• TV and Radio have benefitted from the lack of trust in newspapers.
• Leveson inquiry is likely to lead to much tighter regulation, with potential new legislation to enforce stricter controls in the long run. Implications – The Government
• Government involvement with the press heavily scrutinised, particularly Andy Coulson and Jeremy Hunt. David Cameron were required to handle the phone hacking scandal and thus commissioned Lord Justice Leveson to run an inquiry.
• The Leveson report, released last week found the press and wreaked ‘havoc with the lives of innocent people’.
• Lord Leveson’s recommendations were for the Parliament to set up a strong, independent press regulator, cross party talks are now taking place to agree on the best way to regulate the industry and ensure freedom of the press still exists.

Implications – Other Business

• Not as directly implicated as the Government or the media.
• Changes in security as companies and individuals are now more aware of the threat posed by hackers.
• The News of the World employees charged and arrested has highlighted the importance of morals in conducting business activities.
• The phone hacking scandal along with the global financial crisis have highlighted the need for accountability and transparency in all undertakings Concluding Remarks

In the short term the onus is on the Government and press to create a new regulatory framework, potentially involving new legislation whilst protecting the freedom of the press. In the longer term the main implications will be the change in the way the press operates and the step changes made by other businesses in light of recent controversies. Opportunity For Deloitte: By demonstrating strong governance, transparency, professionalism and accountability Deloitte will be able to market themselves more attractively to new and existing clients.

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