The term ‘fake news’ has been constantly in the headlines since 2016. It has increasingly intensified the debate around the reliability and potential manipulation of reporting and is viewed as a major problem in today's society. However, myths, gossip, (well-placed) rumours or allegations, urban legends, hoaxes, propaganda, and psychological warfare have always been a fact of life. Indeed, deception was often employed in the past – and still is – as a way to exercise power.
It is no easy task for companies or organisations to deal with fake news. Refuting gossip or false narratives is usually far from straightforward, especially because fake news is also used on occasions to make money or to manipulate the share price of a company. What's more, fake news about companies is often spread through legitimate websites, investor forums and Twitter. Occasionally, however, it is put out in a more refined way.
In October 2017, an anonymous tweet appeared stating that Ahold Delhaize was preparing a bid for Kroger, an American competitor. Although rather dubious, the tweet gained credibility and more exposure when the international press agency Bloomberg wrote a short article about it. Kroger's share price rose by 4%, adding over 500 million dollars to the company's market value.
At the end of 2016, 19% of the market value of French construction firm Vinci evaporated in a single day after a still unknown source issued a fake press release announcing that the CFO had been fired owing to accounting irregularities and that a loss of 3.5 billion euros would be incurred.
Similar reports are copied blindly on social and online media without being verified, spreading like wildfire and being distributed to a global audience.
This is nightmare scenario for listed companies because they have to comply with strict guidelines, such as the European Transparency Directive (which requires them to make the same price-sensitive information available to all stakeholders at the same time), unlike other entities (like the media, financial analysts, regulators and politicians) which are free to release whatever they want whenever they want.
The intentional dissemination of false information for the purposes of making money, however, is a punishable offence (under the European Regulation on Market Abuse). And the supervisory authorities will intervene if they suspect market manipulation. But by then the damage caused is usually incalculable and the chances of rectifying the situation slim.
In a company, you can endeavour to quickly distribute accurate and correct information through your own communication channels (press releases, etc.). However, you will never entirely succeed due to the fact that 'good news travels fast, but fake news travels even faster'.
At KBC, we launched an app based on blockchain technology in June 2017. It allows visitors to our site to verify the authenticity of specific press releases, presentations and other documents.
Find out more and try it out for yourself.
Viviane Huybrecht is General Manager Corporate Communication / Spokesperson at Belgian universal multi-channel bank KBC Group, where she is responsible for group-wide press relations, crisis communications, internal communication and corporate brand and reputation management.