True or fake: How do fake news affect a business?

UNITED STATES (OBSERVATORY NEWS) — The topic of the impact of false messages on business was in the spotlight in 2016-2017. Why can untrue news harm business?

“I think Donald Trump ended up in the White House thanks to me,” a material with that headline once caught my attention in the Washington Post. It was dedicated to Paul Horner, who was nicknamed the “impresario of the Facebook news fake empire” and the most influential fake news writer that the whole world believed.

Leading world media managed to discuss the topic of fake news – deliberately false informational materials distributed in the media and social networks in order to gain profit. However, most authors focus on the political consequences of this phenomenon. But even if your business is far from politics, this phenomenon is worth paying attention to and drawing some conclusions.

How fakes take over the world

A typical scheme for distributing fake news is as follows. A source, which can be either a serious political propagandist or just a troll acting “for fun,” places information on a site that looks like a well-known media outlet. However, often the URL of such a site is very slightly different from the original one:, or – this is how links to similar resources look like.

The ability to anonymously register a site, articles published without a signature or under a pseudonym, and their lightning-fast distribution – all this greatly complicates the legal prosecution of such sources for misinformation or slander.

Then the news is “picked up” by a certain number of bots on social networks, and its further distribution is provided by living users who believe in a sensational quote or a provocative headline and are in a hurry to share the link with friends. The wave is growing, the Facebook algorithm allows such material to reach the top.

Why do they shoot

At the end of 2016, 1.86 billion users were registered on Facebook. According to a recent study by an international group of scientists, 63% of users use this social network as a source of news. Topics gaining a large number of likes and reposts automatically fall into the trending topics section.

In addition, one should not forget about such a phenomenon as a “social bubble”, when users are shown only information that is consistent with his preferences expressed earlier. With each new user action, his Facebook feed is filled with more and more personalized results. He receives less and less information that contradicts his point of view and becomes intellectually isolated in his own information bubble.

Thus, the Facebook news feed turns into an effective means of distributing fake content. Moreover, more and more often people do not have time to carefully read the texts, and the picture of the day in their presentation turns out to be formed from news headlines alone. To counter the fake news, Facebook even hired independent fact checkers that flag unverified messages to alert users, but so far the service does not work in all regions.

What does business have to do with it?

At first glance it seems that this phenomenon applies only to politics, but in fact it is not. In many cases, the main goal of distributors of fake news is not political points, but advertising revenue, which is formed depending on the number of views and does not depend on the reliability of the published news. Yes, political topics are picked up by the necessary user groups especially willingly, but who said that business cannot be the target?

One of my favorite examples of fake news is the story of how the Yelp online reviews site allegedly filed a 10 million lawsuit against the creators of the South Park series for a satirical mention of the service in one episode of the series. It is worth noting that Yelp representatives responded brilliantly to the news by posting a rebuttal in their corporate twitter account: “As Abraham Lincoln said, you cannot believe everything you see on the Internet.” But you must admit that fake news can turn out to be less harmless, and then you can’t get by with a playful post on Twitter.

After the victory of Donald Trump in the US elections, social media scattered the allegation that New Balance is supposedly “the official brand of the Trump revolution.” They say that upon learning of this, some owners of shoes of this brand burned their sneakers. The reason for the fake news was the positive comment of the New Balance representative on the Trans-Pacific Partnership, which was interpreted as a statement in support of Trump.

Another well-known case is the boycott of PepsiCo, initiated by Trump supporters, against whom Indra Nooyi , the chairman of the board of directors and CEO, allegedly spoke out . PepsiCo suffered from fake news on several levels at once. The consumer perception indicator (sentiment trend) fell on the day the news appeared, November 13, by 35% compared to the average quarterly indicator in America. A similar global figure fell by 20%, the company’s share price on the exchange also fell and was able to recover only a month later . Thus, the fake news was the worst event for Pepsi in 2016.

By the way, although the topic of the impact of false messages on business turned out to be in the spotlight in 2016-2017, much older examples of manipulating the value of shares on the stock exchange using this “tool” can be mentioned. For example, in 2009, the announcement of the death of AT&T CEO Randall Stevenson led to a sharp drop in stocks and an absolute disorientation of the company’s key stakeholders.


This article is written and prepared by our foreign editors writing for OBSERVATORY NEWS from different countries around the world – material edited and published by OBSERVATORY staff in our newsroom.

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