(Bloomberg Opinion) -- It is always convenient for editors to pontificate about press freedom when they lose court cases. However, the U.K. Supreme Court's decision in Bloomberg LP v. ZXC is something that should frighten every decent journalist in Britain — as well as anybody who cares about justice, the conduct of capitalism or freedom of speech.
In Britain, we are stumbling toward a system in which tabloids can still peek into celebrities' bedrooms but serious journalists cannot report on potential wrongdoing at public companies by powerful people.
The underlying facts of the case that the Supreme Court ruled on today are fairly simple. In 2016, Bloomberg News reported that “ZXC,” a senior executive at a then-U.K.-listed company with billions of pounds of revenue, was under criminal investigation. There is no dispute about the truth of our reporting; instead, ZXC claimed that our article was an invasion of his privacy. His company’s investors, their customers and the public, in his view, had no right to know about the investigation.
Today the Supreme Court found in ZXC’s favor, and that his brush with the law should be kept quiet.
The significance of this judgment for freedom of speech is well hidden amid the 51 pages. A lot of the judgment is arcane, dealing with earlier court decisions and some of it criticizing Bloomberg. For instance, the justices fault our reporters for saying they had seen a letter of request about ZXC from the investigative authorities to a foreign counterpart, rather than saying they actually had a copy. They also question whether we had adequately engaged with the investigative authorities before publishing the material.
I am not going to claim that we at Bloomberg got everything right, and for the record, we have never said that ZXC is guilty of anything. But wade through all the legalese, and the core of today’s judgment is devastatingly simple: In the court's view, the privacy of this powerful person needed to be protected — and that trumped any public interest in our publishing the information in the letter of request.
Let’s be clear about what privacy means in this case. This was not a story about what most of us might see as ZXC’s private life — a picture of his children, his health details, his romantic history. This was reporting on his business activities — and an investigation by the authorities into possible malfeasance at a huge company that could have an effect on many people who invested in it.
It gets worse. If you can’t report about potential wrongdoing before any charge is brought, then, once somebody has been charged (and ZXC has not), all the proceedings become sub judice with potential reporting restrictions added.
The courts have now presented the powerful with a path to keep their names out of print for years. And it really is only for them. The compensation in this case was 25,000 pounds (which we have paid), but that is a fraction of the legal costs. This right to privacy is only for those who can afford it; strangely enough, these often tend to be those who have the most to hide.
Somewhere Robert Maxwell is smiling. Imagine the long list of British corporate scandals, from Polly Peck to Arcadia to Libor, that would have gone unreported, or only been summed up at the end. If some British version of Elizabeth Holmes were to appear in Nottinghamshire, with a miraculous method of interpreting blood genetics and sucking in billions of pounds to a British Theranos, it would be far harder for dogged journalists to track her down in the same way that the Wall Street Journal pursued the real Holmes in California, long before her trial.
I have worked in supposedly serious journalism for 30 years. My guess — and it can only be that — is that for most of that time, ZXC’s insistence that a criminal investigation into his activities, no matter how innocent, should be hidden from investors would have been laughed out of court. For most of my career, judges have been robust in their idea of what the public interest was, especially when it came to people’s business practices and alleged financial crimes. But that was before the hacking of Milly Dowler’s phone, the monstrous Cliff Richard intrusion (which is cited in the judgment) and other tabloidish excesses.
Now the wrong journalists are paying the price for that. While many hackers have escaped censure and some proudly appear on TV, babbling on about celebrities they think they know, the more serious press is finding it ever harder to report on businesspeople’s potential wrongdoing or misbehavior. In particular, the judgment today pushes the U.K. system much closer to the French or German systems, where the powerful can keep their identities secret pretty much from the moment they are investigated until they are convicted — something that big corporations tend to specialize in delaying. Look at the struggle the Financial Times faced to report what was going on at Wirecard.
This will now become common in the U.K. Thanks to other judgments, London has already become the libel capital of the world, with oligarchs flocking here to silence their critics (and, in the process, enriching a lot of British lawyers). Now they can add privacy to their legal toolbox. Even if a reporter can show Oligarch X has done something questionable, poor, defenseless Oligarch X will be able to say that his business really is none of anybody else’s business. His shareholders, lenders and customers may disagree.
All this has been done with very little new legislation being passed. It has simply been justices interpreting old laws in new ways that make it ever harder for investigative journalists to do their jobs, and ever easier for businesspeople to hide what they are doing. That has a plain cost to freedom of speech and to democracy, but also to the economy. One of many reasons the City of London rose above other financial centers in Europe was because its dealings were more transparent. The courts are drawing a curtain around British business. Regardless of whether you sympathize with Bloomberg in this case, we are all much poorer for it.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
John Micklethwait is editor-in-chief of Bloomberg News.
©2022 Bloomberg L.P.
