The Media and the Super Rich
1 May 2018
When it emerged that the Hulk Hogan lawsuit which put the controversial gossip site Gawker out of business was bankrolled by Peter Thiel, there was an almost unanimous outcry from the journalistic profession. It was not only the usual crowd of free speech fundamentalists. Even the likes of David Folkenflik of NPR, who has helped to uncover many of the misdeeds of the Murdoch news empire was alarmed. Gawker, he has pointed out, was the first to report on many of the rumours around Harvey Weinstein, Bill Cosby and Louis CK:
“You know, I've come to think of a lot of what Gawker did as a kind of twilight news. And that is news that's perhaps not ready for prime time, news that may rely on anonymous sources, news that may not even identify by name the person they're reporting on but stuff that's disturbing and often of public interest. And I think this is something that The New York Times and the conventional press is not equipped to do. And yet the surfacing of these issues happened earlier in this twilight news setting. There is a purpose being served, even if it's from a place about which, at times, I had great, great reservations.” David Folkenflik, NPR November 2017
Peter Thiel, a Silicon Valley billionaire, who stumped for Donald Trump, and seems to have modelled himself on every Bond villain, had apparently taken exception to things Gawker had written about him many years earlier and then began secretly plotting and funding its downfall.
In the UK, Hugh Grant, a millionaire film star with a mildly distracting sex life supports the campaign group Hacked Off which tries to make the news media accountable to their own code of conduct. Max Mosley sued the News of the World for invasion of privacy when they published a sex video of him. Then, like Thiel, he financed other peoples’ lawsuits against news organisations, and he donated funds in order to establish a news regulator. He has also been a significant donor to the Labour Party.
It is easy to characterise all of these people as vengeful plutocrats attacking free speech because they don’t like what is said about them. And of course, that is how the media organisations themselves see it. But there is more to it than that. It may be true that they were all spurred to action because of things that were published about them, but there are extremely important distinctions between them.
To begin with it is important to understand what Gawker was. Almost the entire internet is paid for by advertising. Advertisers pay for our attention. Content providers are in the business of gathering our attention, and selling it on to advertisers. Our attention is a finite resource, and competition for it is intense. One time-honoured magnet for attention is gossip, and Gawker was at the frontier of prurience. In fact, it wasn’t only the gossip itself that grabbed attention, it was the actual audacity of publishing it. Look how far we will go. How shameless can we be? Extremeness itself is attention grabbing, and so is animus. They published a video of what may have been an actual rape, and refused the victim’s request to take it down.
Most people believe that we have some right to privacy, and that freedom can’t exist without it. But a few people don’t. “Privacy is for paedophiles” the former News of the World journalist Paul McMullen liked to say. Gawker was known as the site that would publish anything. It had no code of practice. It didn’t check facts or provenance. They didn’t care how the stories came to them. Of course they were going to break stories before more cautious news organisations. Whichever news organisation has the most relaxed editorial controls will be the easiest place to send gossip to smear your enemies, and avoid it coming back to you.
The effect of Gawker was of course not limited to what people actually read on the site. As their strap line read, ‘Today’s gossip is tomorrow’s news’. Once something has been published, repeating it is not equally irresponsible. So, wherever the frontier of prurience is, it affects the whole culture of journalism. It sets the bar for grabbing attention. Gossip is what people say in private behind peoples’ backs. What Gawker seemed to fail to grasp was that when you publish gossip, it stops being gossip and becomes news. Irresponsible unconfirmed news that damages people and is often used to deliberately destroy reputations. Their strap line should have said ‘Today’s gossip is today’s news’.
“I felt like I was in a Black Mirror episode, trapped in my own Gawker Story and I can’t say anything.” Was how A J Daulerio, the Gawker writer who originally posted the Hogan sex video, described his experience of the trial to Ryan Holiday, apparently without wondering whether Gawker was itself an inspiration for Black Mirror.
The news that democracy requires is the new information that is most worthy of our attention. It is not just whatever most grabs our attention. We all know this, and we know that quality of journalism is a major factor in the quality of a democracy. But that is not how the economics work. The market is for attention, and most advertisers apparently don’t care how it is produced. If we want the market to produce the kind of news that a democratic society needs to thrive, we have to regulate it. And democracy requires that people actually receive quality news. It is not enough just to produce it. The implication of this is that we need to ensure that as citizens and voters, our valuable attention is not captured by prurience and lies.
If we accept that the need to protect free speech should not extend to placing the media beyond the law, then we need to consider the options for ensuring that it does obey the law, and there is some real restraint when it oversteps the boundaries of acceptable behaviour.
Is the media constrained by law?When the Hulk Hogan verdict was announced, there was some reaction to the extraordinary figure, but from many quarters people seemed to feel that Gawker had it coming. That changed when it was revealed the Peter Thiel had financed the suit. He had been looking for cases against Gawker that he could put his financial muscle behind. The perception of Gawker quickly changed from that of a nasty bully that had got its comeuppance to a plucky underdog that had been squashed by a relentless and vindictive power.
However, few people stopped to ponder the fact that without his support, Hulk Hogan would not have prevailed. The Gawker strategy for dealing with lawsuits was to make certain that it was never worth pursuing them. They could keep raising the stakes until you could no longer afford to stay in the game. Unless you were Peter Thiel. But if Thiel thought he had been wronged, why didn’t he pursue his own case? For someone trying to get justice for reputational damage, they could always make sure that the result was even more damage. As a billionaire investor he was powerful, but also vulnerable. His reputation was important to his business. (Since the backlash against him, due to the Gawker case, but probably more for his support for Trump, some prominent start-ups have pledged to refuse his money, and some other Facebook directors have apparently been trying get him off the board.) Thiel needed to find a surrogate who had at the same time a strong case and a less vulnerable reputation. Since in court one is trying to demonstrate reputational damage, this is a narrow group. Hulk Hogan was apparently in it.
Finally a case actually went to trial and Gawker was brought to justice. It seems perverse to complain about this. Thiel enabled the legal system to work as it is supposed to. He did not use his resources to buy Gawker and shut it up - the method apparently preferred by Sheldon Adelson. He simply provided the necessary resources for Hulk Hogan to get his case to the place where money is no longer the deciding factor: in front of a jury. The law prevailed and Gawker is no more. And yet the lesson for another Gawker could be read as: break the law as much as you want, but don’t upset a billionaire.
While a Florida jury ordered Gawker to pay Hulk Hogan $141 million, record damages in the UK for Max Mosley was only £60,000. Even with this award, and having most of his legal costs paid, he still found that the case had cost him £30,000. Furthermore, the legal process and the case itself enabled the News of the World to revisit the story time and time again, with the result that many many times the original number eventually saw the video. He of course quickly realised that the law was not going to deter newspapers from this behaviour. Very few people are mad enough and rich enough to risk losing over £1m in legal costs for the sake of possibly ‘winning’ minus £30,000 and in the process making the original transgression a thousand times worse. As a result, in a strategy similar to the one Peter Thiel would later follow, he began looking for other avenues to ensure that the law would bite.
Many British newspapers had been employing a number of illegal methods of information gathering, including hacking into and listening to peoples’ voicemail. Naturally they denied they were doing this, and whenever they were challenged in court, they settled for large sums before they were forced into a legal disclosure process that would reveal the real scale of wrongdoing. The choice facing the claimants was either to accept a large sum of money now, or risk losing and being left with a very large legal bill. Max Mosley began underwriting the costs for a few of the claimants to give them the courage to pursue their cases such that the discovery processes would bring the scale of illegal activity into the daylight. When it emerged that the News of the World had hacked into the voicemail of a murdered schoolgirl, seemingly giving the girl’s mother false hope by causing her to think the girl had checked her voicemail herself, there was a national outcry and the prime minister ordered a public inquiry led by a judge, Sir Brian Leveson.
The question boils down to this: do we leave it to wealthy individuals who are the only people capable of providing the necessary resources to use the legal system to challenge media companies? And if not, what can be done to ensure that more ordinary people have access to justice?
Since the Hulk Hogan victory, Peter Thiel has set up a special fund to pay the legal fees for people with strong cases they can’t afford to pursue. This is a very American solution, relying on individual philanthropy. Do we really want to leave the decisions on who has access to justice to the whim of a few super-rich individuals?
In the UK, strings of damages paid by newspapers for phone hacking claims have piled up above the sum awarded in the Gawker case. However the companies paying them are hundreds of times bigger and can quite easily absorb their losses. Nevertheless, the amount it has cost them ought to be big enough to constitute an effective deterrent for such behaviour. However, the claims are all based on the evidence collected from one or two private investigators that the newspapers used to try and avoid liability. It’s unlikely any of it would have come out without Max Mosley’s backing.
There is also a more sinister element in the UK, with newspapers deliberately targeting politicians who they perceived as a threat. This is a murky area, because what politicians do is usually a matter of genuine public interest. On the other hand, do we want for our politicians only those people who are prepared to give up their and their family’s privacy entirely? And some of these illicit investigations have involved not only illegal behaviour, but also damaging falsehoods. A recent report claims that the Sunday Times, a supposedly up-market publication, had covered up its illegal information gathering practices by claiming that it was getting it from someone at the heart of government leaking to them, thus creating unfounded distrust inside the government. The Sunday Times has not so far faced any legal consequences.
But rather than setting up a new fund for legal actions like Thiel, Max Mosley has tried to improve access to justice by putting money towards funding independent regulators that have an arbitration scheme, which can handle disputes at a fraction of the cost of going to court. The first such regulator, IMPRESS, is set up as a model of what an independent regulator should look like. The Leveson recommendations were enacted into Law in the Royal Charter and Section 40 of the Crime and Courts Act, which respectively define what an independent regulator should be, and provide incentives for news organisations to sign up to one. The Royal Charter establishes a Recognition Panel, with members appointed by the Commissioner for Public Appointments. This panel transparently decides whether a regulator meets the criteria for independence. News organisations are not obliged to join a regulator, but if there is an independent regulator with a low cost arbitration scheme, and they choose instead to force claimants to incur the expense of going to court, then if the judge believes they are deliberately using the expense to frighten away the claimant, they can order the newspaper to pay both sides costs. Similarly, if a claimant sues a news organisation rather than using an available arbitration, and the judge believes they are doing so because they are trying to intimidate the news organisation with costs, the claimant may be ordered to pay the costs, even when they win.
Newspapers say they are worried that the system will lead to a slew of vexatious litigations because claimants face no cost risk if they lose. However a claimant would be wrong to think there was no risk, because if the judge believed the claim was vexatious, they would not order the newspaper to pay the costs. Newspapers also claim that they would be forced to sign up to IMPRESS, which they object to principally because it is funded almost entirely by Max Mosley. This is also not the case though. There has never been any expectation that they would sign up to IMPRESS. Rather, they would face pressure to make sure that the regulator they set up themselves met the Leveson standards, including providing arbitration. The newspapers try to paint the picture that this system amounts to the State censoring the press. Really though, it is a way to allow citizens to defend their existing rights, by giving them the access to the justice system that they are currently denied.
Declaration of interest.
I am a Trustee of The Alexander Mosley Charitable Trust, which provides funds for independent media regulators. I come to be a Trustee because I was a close friend of Alexander Mosley, an extraordinary person who also suffered from depression and died from a drug overdose. I saw the impact that the News of the World had on him. It was a complicated thing, but I have no doubt that it was a contributing factor in his death.