While fake news is most associated with politics, it can seriously affect companies, too. At worst, it can damage corporate reputations, cost millions, and send share prices tumbling.
Examples include a 2022 fake tweet about Eli Lilly claiming that insulin was going to be free (which caused the stock to fall by more than 4%) and a 2023 fake picture of black smoke billowing out of what appeared to be a US government building near the Pentagon prompted a sell-off in markets.
In 2025, the China Securities Regulatory Commission said it would issue clarifications and increase education of investors to combat fake news.
So, how do you defend yourself against fake news, what are the biggest risks, and how do you respond?
Is fake company news new?
It feels that way, but it isn’t. Prior to social media, fake news was disseminated by word of mouth (and later email) and spread at a leisurely pace, often dying out naturally. Now, it proliferates much faster and much further. It is also far more sophisticated than it once was.
A few years ago, it might have been a malicious tweet or Facebook post. Now, artificial intelligence (AI) is making the problem worse. It could be a deepfake video of your CEO.
Where does it come from?
A common view is that it’s all teen hackers in hoodies having malicious fun. But this is a very out-of-date stereotype.
While some fake news doubtless originates in this way, it also comes from sources that range from people trying to drive stocks up and down (as with meme stocks), unscrupulous competitors, and even from foreign governments seeking to damage rival nations’ economies.
Have a plan
One reason businesses struggle with fake news is that they have no protocol in place. So, businesses need to prepare in the way they would prepare for any crisis, using basic risk management techniques of identifying and assessing the likely risks, then developing comprehensive approaches for minimising the impact of those risks in the event they do occur.
As a first step in identifying and assessing your risk, anticipate the sort of areas where you might be vulnerable. For instance, if you’re an investment business, it might involve fake news about unethical behaviour. If you’re a food business, it could involve claims about contamination of your products. If you’re an IT business, it might involve security.
Keep an eye on the internet and social media
Set up online alerts for your business’s name (and possibly the names of key people) and monitor social media sites such as Reddit.
It’s true that big multinationals tend to be targeted the most. But it is a mistake to think that if you are not a newsworthy company and being obscure means that you won’t suffer at the hands of online trolls, pranksters, and bad actors. Targets are often chosen for no good reason.
It’s also incorrect to think that you won’t be targeted if you’ve done nothing wrong. Being a “nice” company that behaves with honesty and integrity does not automatically prevent you from being a victim of malicious and damaging information.
Move quickly
A further reason businesses struggle with fake news is that they’re caught off guard and they don’t have responses in place.
Even if you put out a kind of bland denial/holding statement, it will often be better than nothing — and you are still taking some control of the story.
The writer Mark Twain said, “A lie can travel halfway around the world while the truth is still putting on its shoes.” The modern version of this might be that a fake video can gain 25 million views while a company is still formatting a response. So, you need to respond fast — and this is why you have a plan.
Incidentally, this quote is only attributed to Twain — there is no proof he actually said it, making it, potentially, an example of 19th-century fake news.
You should also think about how you respond to stories that are flattering but untrue. This can be difficult, especially if they are delivering benefits.
What do you say?
Acknowledge that you’ve heard or seen the story. Then go on to explain that it isn’t true and outline the reasons why. Be careful here. If there are elements of truth to it (or you are unsure), you might give yourself wiggle room by saying you believe it’s inaccurate and you’re going to investigate.
This will at least buy you some time. Of course, there are some stories you can ignore (particularly if they’re perennial rumours) and some types of fake news that you can lean into and deal with using humour. Positive fake news that makes you look good (and might be disseminated by your most loyal customers) may fall into this category.
Investigate if necessary
If the fake news or its effects are serious, you should try to find out where it originated. Sometimes it will be a genuine mistake (and you can ask for it to be corrected). But if it’s malicious, you may need to take action — ranging from asking social media providers to take down posts to threatening legal repercussions.
Even if you cannot identify the source, your investigation won’t be wasted. You will likely learn about how it spread, what made it attractive, and gain insights, which are likely to help you combat similar stories in the future and build resilience.
Have a policy for staff
Most companies have policies covering what staff can and cannot post about their employer on social media. This should include how they respond to fake news about the business if they see it.
In general, it’s probably best if staff are told not to respond and to report anything to either the media team or senior management. A poor or rash response, even if it’s born out of loyalty for the company, can inflame any situation and, again, may be exactly what the person or entity that created the fake news wants.
Be trusted yourself
One of the best ways to ensure that misinformation about your own business is easy to counter is to build a reputation for probity, integrity, and transparency. This means that when fake news about your company is disseminated, people are less likely to give it credence and spread it — and it also means that any refutation you issue is more likely to be readily believed.
Rhymer Rigby is a business writer and columnist. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.
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Articles
- “Annual Report Reveals Keys to Boosting Enterprise Risk Management”, FM magazine, 31 October 2024
- “Improving Enterprise Risk Management: 5 Steps to Success”, Journal of Accountancy, 23 July 2024
- “How to Deal With the Risk of Online Falsehoods”, FM magazine, 11 November 2022
