Murdoch's News of the World is accused of hacking Milly Dowler's v-mail after she was kidnapped and, it turns out, murdered.

Ford Motor Co. was one of the first companies to yank its ads from the popular News of the World following revelations of a deepening phone hacking scandal involving the London tabloid.

The newspaper, owned by Rupert Murdoch’s News Corp., was already following revelations its employees had hacked into the cellphone voicemail accounts of a number of celebrities, as well as aides to members of the British royal family and government.  But the issue landed on the front page when a competing paper published reports that News of the World had gotten into the voicemail of a teenage girl who was abducted and murdered in 2002.

“If (the allegations) are true, this is a truly dreadful act and a truly dreadful situation,” declared British Prime Minister David Cameron.

The Conservative PM found himself in a particularly awkward situation as he is a close friend to Rebekah Brooks, the editor of News of the World in 2002 and the target of those demanding she resign because she ran the publication when Milly Dowler disappeared while walking home from school.

A serial killer was eventually arrested and only recently convicted of Dowler’s murder.  Critics contend that the News may have delayed bringing the killer to justice because when it hacked into the teen’s v-mail it deleted some messages, making it appear she might still be alive.  The paper’s actions also gave false hope to the girl’s family, leading them to believe she might still be alive.

When Cameron came to power, last year, his initial communications director was Brooks’ successor, Andy Coulson.  Coulson was ousted from the paper in 2007 when the issue of hacking first was revealed.  He was subsequently forced to leave the Prime Minister’s office when the issue resurfaced earlier this year involving efforts to spy on the royal family, politicians, celebrities and even some of those killed during the terrorist bombing rampage that struck the British subway and bus network.  News International has already set aside $30 million to compensate celebrities who took it to court.  But the costs could soon mount.

With British society in an uproar and Parliament planning to discuss the newspaper’s long-running policy of hacking, a Twitter campaign has been launched, organizers contacting a number of key News of the World advertisers, asking, “Dear [@advertiser] Do you think it ethical to stock a newspaper prepared to hack a murdered girl’s phone?”

Apparently, Ford is one of the advertisers that does not think it ethical, the automaker pulling its ads and issuing a statement that, “We are awaiting an outcome from the News of the World investigation, and we expect a speedy and decisive response. Pending this response, we will be using alternative media within and outside News International Group.”

Dozens of other advertisers have already indicated they will or are considering pulling out of the tabloid, long known for its coverage of the seedier side of British life, with an emphasis on political and entertainment sex scandals and lurid crimes.  Along with Ford, automakers Renault and General Motors’ Vauxhall have pulled out, as has Virgin Holidays, an affiliate of Virgin Airways.   Supermarket giant Tesco, Coca-Cola and Proctor and Gamble are among those expressing concern and who may also act on their ties to the News.

Vauhall is the paper’s 14th largest advertiser, Renault its 40th, and together they had spent more than $1.5 million with the paper through May, according to a report in the Guardian, the other British newspaper that broke the Dowler scandal.

Ford plans to continue advertising – as do most of the others – in British papers like the Timesand the Sunday Times.  But the scandal could prove a serious problem for Murdoch.  It could ultimately force out editor Brooks, a senior manager in the Australian Murdoch’s media empire. And it could impact his efforts to gain control of the big, British-based BSkyB satellite and cable operation.

Another social media campaign, proclaiming it, “No time to give Murdoch more power,” is asking Britons to sign a petition asking regulators to reverse their decision in favor of News Corp.  Critics had largely been ignored, until now, despite concerns about the increasing concentration of media ownership.

Among other operations in the U.S., Murdoch’s News Corp. controls both the Wall Street Journal and Fox News.

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