Home Hacking Why the UK Phone-Hacking Scandal Still Matters

Why the UK Phone-Hacking Scandal Still Matters

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Phone hacking is the scandal the UK just can’t seem to shake.

It’s back in the headlines more than a decade after a wave of public anger led to the closure of the country’s best-selling Sunday newspaper, a yearlong public inquiry and a regulatory overhaul. Prince Harry, Elton John and a group of other notable names are suing Associated Newspapers Ltd., owner of the Daily Mail and Mail on Sunday, over alleged commissioning of unlawful acts including listening to telephone calls and illicitly accessing private information. The company has emphatically denied the accusations, calling them “preposterous smears.”

Phone hacking turned the activities of the UK newspaper industry into a major global story, providing a drip-feed of revelations and live TV drama (including the “most humble day” of Rupert Murdoch’s life) to rival any of the celebrity exclusives that are the stock-in-trade of the popular tabloid press. Those who have followed the saga from other parts of the world may wonder when it will finally be laid to rest, and why Britain seems uniquely bedeviled by a systemic problem of unethical behavior in parts of the news-gathering business.

In reality, the scandal never went away. Lawsuits have continued to be filed since an inquiry led by retired judge Brian Leveson concluded in 2012, and have been working their way through the courts. These generally relate to activities undertaken back in the 1990s and 2000s, the heyday of phone hacking. (Who, after all, uses voicemail anymore, in the age of WhatsApp and other text-based smartphone messaging systems?) Hamlins LLP, which is representing Prince Harry and others, didn’t put a timeline on the allegations in an Oct. 6 statement. In its rebuttal, Associated Newspapers said the articles concerned were up to 30 years old. Paul Dacre, the former Daily Mail editor, has denied repeatedly that phone hacking took place at the group.

It’s a significant development, all the same. Along with a separate lawsuit by former member of parliament Simon Hughes, these are the first such legal claims leveled against Mail titles, threatening to draw the most successful UK newspaper group of recent years into a morass that cost Murdoch’s News Corp. more than $1 billion, by some estimates, and weighed on Mirror Group Newspapers. Indeed, Associated Newspapers — which is controlled by the Harmsworth family — called the action “a pre-planned and orchestrated attempt to drag the Mail titles into the phone-hacking scandal.”

Alongside celebrities such as Liz Hurley and Sadie Frost, the presence of one litigant in particular is potentially damaging for the Mail group: Doreen Lawrence, who like the others alleges the Daily Mail misused her private information. Her teenage son Stephen was murdered in an unprovoked racist attack in 1993, and the Daily Mail campaigned for his killers to be brought to justice. The paper has frequently held up that cause celebre as an example of the power for good of its journalism, which has faced criticism for negative portrayals of migrants and other groups.

There’s a symmetry here. Back in 2011, another murdered teenager was central to the demise of the News of the World. An outpouring of public revulsion followed reports that its journalists had hacked into Milly Dowler’s voicemails. In response, Murdoch shuttered the newspaper, which at the time was the UK’s market-leading Sunday title. That position is now held by the Mail on Sunday.

Besides dealing a blow to the Mail group’s standing, the Lawrence allegations might give renewed public impetus to the cause of regulatory reform. There’s unfinished business left over from the Leveson investigations a decade ago. A second part of the inquiry was scheduled to probe the relationship between the press and police. It was postponed pending the conclusion of court cases (the former editor of the News of the World, Andy Coulson, was among those who went to prison), and later scrapped entirely by the Conservative government. 

“There’s more that needs to be investigated,” Nathan Sparkes, chief executive of Hacked Off, a campaign group that is pushing for Leveson 2 to go ahead, said in an interview. The group says the Independent Press Standards Organisation, the self-regulatory body set up after the first inquiry, isn’t fit for purpose. Most national newspapers have signed up to IPSO, though it fell short of the recommendations for independence and effectiveness set out by Leveson. Those that declined to join include broadsheets such as the Financial Times, the Independent and the Guardian – which broke the phone-hacking scandal in the first place.

For all the controversy and upheaval of a decade ago, the industry’s success in establishing another ineffective regulator and heading off a deeper investigation of its practices suggests that the fundamental nexus of power between press and politicians remains essentially undisturbed. This symbiotic structure has enabled mass-market newspapers to ride through periodic scandals over unethical behavior, creating a sense of impunity that arguably allowed abuses to flourish. “They don’t want to be fiercely regulated,” says Paul Lashmar, who spent 40 years as an investigative journalist with news organizations including The Observer and now teaches in the department of journalism at City University in London. “They resisted at every turn.”

Why is the UK like this? The answer lies in the economic and cultural peculiarities of the British newspaper landscape. The country is small and compact enough to have a national newspaper market, and as a result outsize power accrues to those who can dominate. The Daily Mail sells more print copies than any newspaper in the US, a far larger but more fragmented market. 

A vivid example of the leverage that the popular press holds over politicians came during the Leveson inquiry from Kelvin MacKenzie, former editor of The Sun, the News Corp. tabloid that for decades was Britain’s best-selling daily newspaper. MacKenzie described how then-Prime Minister John Major called him on the night Britain was forced out of the European Exchange-Rate Mechanism in 1992 to ask how the story would play in the next day’s paper. “Well actually I’ve got a bucket of s*** on my desk, Prime Minister, and I’m going to pour it all over you,” MacKenzie said he told him. (Major said he couldn’t recollect that conversation.) Were the setting transposed to the US, it’s difficult to imagine Joe Biden putting in a similar call to the editor of the New York Post.

Just as importantly, tabloid culture is the UK market’s central driving influence, rather than being a fringe offshoot as in some countries. Unlike the sober and earnest pursuit of serious journalism, tabloid story-chasing is much more of a game. For those who like to play, it is about winning, at all costs. Tabloids are a circulation game, and what sells papers in this fiercely competitive industry are exclusive stories, particularly about prominent public figures. You don’t need a McKinsey briefing note to tell you that people will behave in the way they are incentivized to behave. Games aren’t inherently moral. Players will do what they can to win within the rules. And if the rules aren’t particularly clear, or the referee is constantly looking the other way…

Broadsheets compete on a more complex array of factors, so aren’t subject to the same market pressures. That perhaps is one reason that newspaper industries in other countries haven’t encountered problems with unethical or unlawful conduct on quite such an industrial scale as in Britain.

One final element in the mix needs to be considered: the internet. During the worst excesses of the phone-hacking scandal, newspapers were already losing print sales to online competitors. Advertising spending migrated to Google and other web providers, hollowing out revenues and increasing the pressure for exclusives that will keep readers coming back. In 2020, the Daily Mail said it had overtaken The Sun’s monthly print circulation for the first time in 42 years. But it was a pyrrhic victory. The Mail is No. 1 not because it is growing but because it is shrinking less rapidly. The newspaper sold 840,000 copies a day in August. Two decades earlier it was selling 2.4 million, while The Sun was shifting 3.7 million.

Newspapers have had some success in building up their own online operations — particularly the Mail group, whose MailOnline was the world’s sixth-most -visited news site in September, according to Press Gazette, a trade journal. That growth hasn’t been enough to compensate for the loss of print sales, at least yet. Daily Mail & General Trust Plc, which was taken private earlier this year by the trust of its founding family, said last month that it will bring news gathering in its print and online editions closer together to “free up resources.” For all the political influence that tabloids retain, the financial story of the past decades has been one of structural decline.

If phone hacking remains in the public eye, it’s possible that campaigners may get a second chance to push for a more meaningful model of self-regulation, especially as a change of government starts to look more likely. The blameless ordinary victims of such media abuses deserve more consideration. But there are already bigger things to worry about for those concerned with the health of the media landscape, particularly the increased consumption of news via social media, where misinformation and targeted influence operations can flourish. Young people are getting more of their news from TikTok. The ground is shifting under our feet, and before long phone hacking may start to seem like a historical curiosity. Generals always fight the last war, as the saying goes. It may be so again this time.

More From Bloomberg Opinion:

• Meghan and Harry Aren’t Much of a Money-Spinner: Alex Webb

• How the Tories Brought Endless Anarchy to the UK: John Authers

• Why I’m Glad to Be Living in Crisis Britain: Matthew Brooker

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Matthew Brooker is a Bloomberg Opinion columnist covering finance and politics in Asia. A former editor and bureau chief for Bloomberg News and deputy business editor for the South China Morning Post, he is a CFA charterholder.

More stories like this are available on bloomberg.com/opinion

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