Last week an anonymous tweet suggested that Ahold Delhaize, a Dutch-Belgian supermarket, planned to place a bid on her American competitor Kroger. What happened? The Kroger share price increased by about 4%, which meant a total increase in market value of $533 million. Funny fact: nothing in this tweet was true. Some good fake news to make some good money.
Fake news and rumors have always existed, but since the rise of social media, they spread a lot faster than in the early days. Fake business news is mostly spread through legit websites or Twitter. At the end of last year, fake news caused a loss of $6,5 billion in the French company Vinci’s market share. A still unknown spread the –fake- news which stated that a financial board member was fired because of some accounting irregularities which cost the company around $3,5 billion. An again, nothing of the story was true.
Is it illegal to spread fake news? There are enough websites with fake news, for example the satiric website The Onion, which are not illegal. But there are a lot of laws you can break by intentionally spreading fake news. For example in The Netherlands article 12 of the Autoriteit Financiele Markten states that the intentionally spread of wrongful information to earn money is illegal. Suspicions of such behavior can result in questions from the AFM, stop or reverse trading and in the worse case result in fines and lawsuits.
Is there anything you can do this fake news? In most situations, companies choose not to comment, because that forces them to respond to every online allegation. In the Vinci incident, the company responded to the fake news, but the damage was already done. Unfortunately, and in some cases fortunately, it’s hard to refute the big amount of online fake rumors.
Hi Christine,
You chose quite an interesting topic for this blog post in my opinion and I do have some comments about it. You mention social media as a reason for the quick spreading of fake news regarding publicly traded companies. Since everyone can use social media and easily create bots (see the link below) it’s arguably easier than ever to broadcast a message of your desire to the world. In this context that could be spreading fake news to influence the stock price of a certain company that you could benefit from. Such a simple operation could work because a lot of the trading done today is automated, based on algorithms checking incoming news among other things. But, where the creator of the fake news might earn money, other legitimate investors might lose money. I’m curious to know if you found that there is there a history of the AFM or other similar authorities abroad enforcing this law, or is this still a dubious activity you might well get away with?
https://venturebeat.com/2017/02/02/how-to-build-your-own-twitter-bot-in-less-than-30-minutes/
Hi Niek, thank you for your comment and for the interesting link! I knew it was not hard to create bots but i didn’t know it was that easy. I couldn’t answer your question right away so I started googling, but I could not find any history of the AFM or other similar authorities who enforced this law. Another way, which is mainly used in the United States, to try to tackle the spread of fake news, is by civil suit. Unfortunately, the changes of winning a suit like these in fake news situations, are low because of the high standards which need to be met to win a civil defamation suit. These are the conditions I found:
“What are the conditions for winning a civil defamation suit? All of the following must be true:
The statement in question is about another person and is provably false.
The statement is published to a third party who is not the person being defamed. In this context, publishing doesn’t need to be printed, merely “made available” to another person.
If the statement is of public concern, the publisher must be liable in negligence. Public figures who say they have been defamed also must prove that the publisher of the statement acted with “actual malice” by intentionally publishing something they know to be a lie or through having no regard for whether the statement is true or not.
The person the statement is made about must be damaged in some way by the statement.”
Regardless of the fact that a business is able to file a civil law suit, the question is of it is possible for a business to win a suit like this when they are duped by fake news. I couldn’t find any history of this as well. So I think we can say that at this time, the spread of fake news is indeed still a dubious activity you might well get away with.
Hi Christine,
Really interesting article! It’s definitely a very real and dangerous thing the way these fake news articles have been affecting the world. But I’m curious where the line can be drawn here. In the US where I’m from, we have the right to freedom of speech. And I’m wondering as Facebook and Google become increasingly pressured to filter these fake news results out, where the line can be drawn between infringing on that right to free speech and ensuring that the potentially disastrous effects of the spread of fake news does not get out of hand.