Canal+ Technologies and the Canal+ Group, a pay-tv subsidiary of Vivendi Universal, have filed a US$1 billion lawsuit against the NDS Group, a London-based technology firm controlled by Rupert Murdoch’s News Corporation.
The suit accuses NDS of hacking into the security system controlling access to Canal+ digital TV signals, and aiding the production of counterfeit smart cards by providing the software codes to website DR7.com, which promptly published them. Smart cards plug into a set-top box and control which programs a customer can access; counterfeit cards allow unpaid access. Canal+ claims NDS devoted substantial resources to breaking the codes in an effort to harm Canal+’s competitive position in the digital TV market.
nds responded immediately with a statement that called the accusations by Canal+ ‘outrageous’ and ‘baseless’. NDS president and CEO Abe Peled denied his company’s involvement, and blamed Canal+’s security issues on ‘the inferior nature of Canal+’s conditional access technology, the failure of its business plan to contain measures to protect against piracy, and its failure to deal with piracy once it began.’
The peripheral details are intriguing. Only one week before Canal+ filed suit, it had been in talks with nds about a potential technology merger. ITV Digital in the U.K., which uses Canal+ smart card technology for its digital transmission, is said to be considering a suit of its own against either NDS or Canal+. Further, the Canal+ suit outlines in detail how NDS allegedly obtained the smart card codes and when, suggesting insider information.