ern's: Murdoch press savages Australian rival in pay TV row

News Limited accuses Fairfax group of trashing media principles

Australia's raucous press is no stranger to confrontational journalism, but the last week has seen a bitter war of words between the country's two largest newspaper groups, with a Rupert Murdoch subsidiary accusing its rival of "trashed journalistic principles".

Titles owned by Murdoch's News Limited – led by the Australian, the country's only national daily – have pitched themselves against rivals at Fairfax Media in a slanging match characterised by personal insults, accusations of deliberate falsehoods and commercially motivated reporting. The row between the two groups has set new lows, even by the standards of the normally hostile relations that exist between the two companies.

It began last month after Fairfax Media's Australian Financial Review (AFR) published more than 20 pages of complex allegations that a News Corporation company, NDS, had encouraged hackers to damage a rival pay TV operator in Australia in the 1990s. The journalist behind the story for the AFR, Neil Chenoweth, worked on the BBC's Panorama programme that made similar allegations of pay TV piracy in Britain.

News Limited strenuously denied the claims – and its publications followed suit, attacking Fairfax to boot. Editorials in Murdoch's flagship newspaper, the Australian, were swift and stinging, with the paper accusing Chenoweth of having made a career out of "trading conspiratorial stories". It continued: "The only possible conclusion from this tawdry episode is that Fairfax has been using its financial daily [the AFR] to damage its chief rival [the Australian]."

A second leader in the Murdoch title said: "The attempt by our competitors to portray News as an amoral, bordering on criminal, entity has warped their coverage and trashed journalistic principles."

Murdoch executives did not hold back either. Kim Williams, CEO of News Limited, said Chenoweth's story was an "exercise in tar and feathering" by the AFR and "a conspiracy theory in search of a story with innuendo, sly references and unrelated pieces of information being cobbled together as if there is some dastardly bad behaviour lurking within it all".

The 81-year-old media mogul waded in, tweeting that the AFR's story about pay TV piracy was "proof you can't trust anything in Australian Fairfax papers, unless you are just another crazy", in a stream of aggressive denials that had echoes of News International's response in the UK when the first allegations of phone hacking were levelled by another newspaper in 2009.

The AFR's editor, Michael Stutchbury – who until last October was economics editor at the Australian – described the Murdoch camp's attack on his paper as a "trademark elbows-out reaction". Stutchbury accused the Australian of focusing "almost exclusively on questioning the motives behind the story", which he said should have been subsidiary to the substance of the AFR's stories.

Dr Tim Dwyer, senior lecturer in media and communications at Sydney University, said the row between the newspaper groups was symptomatic of Australia's newspaper duopoly, where Murdoch and Fairfax have 90% of the readership between them. "In terms of western democracies that's a very extreme level of concentration and it explains why there's such head to head enmity between the two major players," he said.

Murdoch's News Limited papers dominate the market with 70% of the country's readership, including eight of the 12 major daily newspapers. In three state capitals – Adelaide, Brisbane and Hobart – the only major daily paper is Murdoch-owned. Fairfax Media owns 21% of the readership, including the AFR, and the Sydney Morning Herald and The (Melbourne) Age. "There's a huge tension over creating audiences and this spat is the latest battle in the branding war between them," said Dwyer. David McKnight, author of Rupert Murdoch: An Investigation of Political Power, says the duopoly of the Australian print market is damaging journalism.

"This is the latest in a whole lot of incidents where, mainly News Limited through the Australian newspaper, has damned and dismissed Fairfax on a political or commercial basis," he said.

McKnight added that the Australian had made no real attempt to independently report or investigate the allegations about pay TV piracy made by Fairfax's AFR. "What's happened is that the Murdoch press in Australia has basically just blustered, unquestioningly quoted its own parent company, uncritically reported sweeping denials, refused to address specific facts and launched personal attacks. The result is that the public loses out and the story is shut down," said McKnight.

"In a more competitive newspaper market like Britain, if a big story like this broke in one newspaper it would be followed up and enhanced or disproved by the other papers. Above all, there would be a real testing of the facts, which has not happened here."

McKnight is also critical of the government's response to the story. "It's a minority government and doesn't want to get on the wrong side or be seen to be making enemies," he said "Publicly they're not making any suggestion that the story should be investigated any further which is traditionally what happens in an open and freer society," he said.

The communications minister, Stephen Conroy, said any allegations of criminal activity uncovered by the Australian Financial Review should be referred to the police. To date, no such referral has happened.

Alison Rourke

Dan Sabbagh