One of the biggest scandals to engulf the British press since princess Diana’s death began with a trivial bit of gossip about her eldest son. In late 2005, Rupert Murdoch’s tabloid News of the World ran a story about Prince William’s plans to meet with Tom Bradby, a well-known television reporter and trusted confidant of the prince’s. Bradby was supposed to help William patch together a film from footage William had collected during his gap year, between high school and university, when he camped in a hammock in the jungles of Belize and lived on army rations. Only four people—Bradby, William, and two royal aides—were supposed to know about the plan, so seeing it splashed across News of the World’s pages raised some troubling questions.

The day after the story appeared, Bradby turned up at the Prince of Wales’s palace, portable editing gear tucked under his arm, and was ushered into William’s private chambers. The two discussed the leak and how it might have happened. Bradby shared his suspicions, based on some “jaw-dropping” things he had learned while working as a royal reporter a few years earlier. “At the time,” he recalls, “I had heard that people were regularly breaking into voicemails. The practice was colossally widespread, and I suggested that might be what was going on.”

After the meeting, the royal family enlisted a retired British spy to investigate Bradby’s hunch, then called in Scotland Yard, which assigned an antiterrorism team to the case. Months later, in August 2006, police arrested Clive Goodman, the News of the World’s royal editor, and a private investigator named Glenn “Trigger” Mulcaire. The pair was accused of hacking into the voicemail of top royal aides more than six hundred times. Mulcaire, who had worked at the paper since 1997 and was paid at least $200,000 a year, was also suspected of eavesdropping on messages intended for a number of politicians and celebrities, among them former Home Secretary David Blunkett and supermodel Elle MacPherson.

Those revelations quickly mushroomed into a national scandal that would stretch over months and stir a deep reservoir of public outrage over the excesses of the tabloids. It also rekindled debate over an issue that has vexed Britain for decades—how to balance privacy rights against press freedom. Large swaths of the public have begun to feel that something needs to be done to keep the tabloids from trampling on private lives, and some new measures are already in the works. Meanwhile, many journalists fear that efforts to rein in gossip mongering could hamper legitimate reporting on public figures. “There are genuine abuses going on, and it is making things more difficult for the rest of us,” says David Leigh, the Guardian’s editor for investigations. “The tabloids are threatening to poison the well for all journalists.”

Shortly after Goodman’s arrest, Britain’s Information Commissioner, Richard Thomas, whose job it is to protect private information, heaped more shame on the tabloids by publishing a follow-up to a May report suggesting that journalists were “driving the illegal trade in confidential personal information.” It focused largely on a corrupt private detective who bribed officials to get bank records, medical files, and other information. His client roster consisted almost entirely of reporters.

In fact, at least 305 journalists from thirty-one publications had hired him more than thirteen thousand times over a three-year period. Payments for these services stacked up to around $2 million. The worst offender was the Daily Mail, where fifty-eight reporters had enlisted his services, but most major British tabloids were on the list, along with a few broadsheets and magazines. Mick Gorrill, the head of enforcement in Thomas’s office, says the case may be just the beginning. “We believe these tactics are extremely widespread,” he told me.

It was against this backdrop that Clive Goodman appeared at London’s criminal courthouse, the Old Bailey, for his sentencing hearing on January 26, 2007. The judge, Justice Gross, chided him for his “grave, inexcusable, and illegal invasion of privacy,” and sentenced him to four months in prison. It was the first time in more than forty years that a British journalist had been jailed. The verdict shocked the British press and touched off a shake-up at News of the World. Within hours, the paper’s editor, Andy Coulson—who was reportedly destined for great things in Murdoch’s empire—announced his resignation.

The fallout for the rest of the press was just beginning. For months before the Goodman scandal broke, Richard Thomas, the information commissioner, had been pushing for tougher penalties for violations of the Data Protection Act, which is designed to safeguard sensitive personal information. Shortly after Goodman was sentenced, the government moved to adopt Thomas’s plan. Now, those who illegally access private data could face up to two years in prison instead of a simple fine. Gorrill says the tougher penalty was the only way to rein in the growing black market on private information.

But many journalists worry that the threat of jail time could hamper serious investigative reporting, especially given the law’s broad scope. Not only does it safeguard sensitive personal records, like bank statements and medical files (particularly in their electronic forms), it also protects more basic information, like unlisted phone numbers and vehicle-registration data. There is a built-in exception for stories that serve the public interest, but reporters have to be reasonably certain beforehand that the information they seek will reveal official misdeeds, a virtual impossibility for investigative journalists, who often dig based on hunches.

The stiffer penalties, mixed with tougher enforcement, have also raised the specter of journalists being forced to reveal sources of sensitive information, even if they are ultimately cleared of wrongdoing. “That thought alone is having a chilling effect, not only on reporting, but on the willingness of whistleblowers to step forward,” says Jeremy Dear, the general secretary of the National Union of Journalists.

The Goodman scandal, and other high-profile privacy violations, also prompted a parliamentary committee to launch an investigation of the Press Complaints Commission—an organization set up by newspapers and magazines in 1991 to avoid government regulation. The committee’s final report, released in July, concluded that self-regulation, while flawed, was the only way to avoid “very dangerous” government meddling in matters of press freedom. But committee chairman John Whittingdale also warned that self-regulation “must be seen to be effective if it is to survive.” Right now, its effectiveness is in serious doubt.

The commission’s job is to enforce a written code of practice to ensure reporting is accurate and fair and to guard against unseemly tactics, like the ones Goodman used. Many of the commission’s members—and all of its funding—come from newspapers and magazines, and it has no power to levy fines. Instead, it urges editors to publish corrections or apologies, a system that Stephen Abell, the commission’s assistant director, insists is highly effective. “It’s quick, free for complainants, and can be done in private, without involving lawyers,” he says. “This means our reactions are more nimble.”

But the commission is widely considered to be toothless. “It’s a useless organization,” says Jonathan Coad, who heads litigation at Swan Turton, a London law firm specializing in media issues. “The tabloids ignore it entirely.” Among the chief complaints is that the commission is too timid to crack down on privacy violations in a market where celebrity snaps can sell for more than $500,000 and a single hot scoop can raise newsstand sales by 20,000 copies.

In the wake of the Goodman case, the commission roundly condemned the reporter’s actions and added a ban on “misrepresentation or subterfuge” to its code of conduct. But it ultimately cleared News of the World of any wrongdoing.

Parliament has investigated the commission and its predecessor, the Press Council, on a number of occasions, and issued a stack of reports on the failures to protect privacy through self-regulation. It has also threatened repeatedly to clamp down on privacy violations. After Princess Diana’s death in 1997—which many blame on the paparazzi that chased her car in the moments before it crashed in Paris—the British public’s mood toward the tabloids soured further, and the debate over privacy and the press intensified. To stave off regulation, editors backed a tough new code of conduct that banned harassment and set strict limits for reporting on private lives. But ten years later, nothing much has changed. In fact, with more than a dozen national tabloids competing for a shrinking pool of readers, the competition for scoops is fiercer than ever.

Many journalists and legal experts have come to believe that unless the commission reins in privacy violations, it’s just a matter of time before Parliament or the courts do it for them. In fact, a series of recent rulings on tabloid stories and tell-all books is already forming the basis of a de facto privacy law.

One of the most famous cases involves Prince Charles. Since late 2005, he has been fighting to block the Mail on Sunday from publishing his personal journals, copies of which he distributed to more than twenty people. One of them was written during his official trip to China for the 1997 Hong Kong handover celebration, where Britain’s future king watched his nation surrender one of the last shreds of its fraying empire. In it, he refers to China’s leaders as “appalling old waxworks” and bemoans “the gradual undermining of Hong Kong’s greatest strength—the rule of law.” The Mail on Sunday has argued that the information has public-interest value because it shows the political leanings of a future head of state. But so far, the courts have sided overwhelmingly with Prince Charles, saying he holds the copyright on the diaries and has the right to keep them confidential.

Meanwhile, in May, England’s highest court ordered Hello! magazine to pay more than $2 million in fines for hiring a photographer to pose as a waiter and snap photos of Michael Douglas and Katherine Zeta-Jones exchanging marital vows back in 2000 because another magazine has paid for exclusive rights.

Most of the recent rulings on privacy and the press involve petty tabloid gossip, but their implications may reach much further. A new legal landscape appears to be taking shape, one in which the courts can censor information about the private lives of public figures, even when the material is in the public interest or is already in the public realm. “Britain has long been the libel capital of the world. Now it’s in danger of becoming the privacy capital,” says Jeremy Dear of the National Union of Journalists. “In other words, a place where the rich, the famous, and the powerful can hide behind the law and are no longer accountable to the people.” 

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Mariah Blake writes for the United States Project, CJR's politics and policy desk. She is based in Washington, DC, and her work has appeared in The Atlantic, The New Republic, Foreign Policy, Salon, The Washington Monthly, and CJR, among other publications.