© 2016 Summerhill Capital Management

Please reload

Recent Posts

Caveat Emptor

July 31, 2017

Even before he was elected, Donald Trump was establishing a narrative that Americans are being deceived by the mainstream media. Seemingly any negative press he receives is labelled “fake” and dismissed by the administration as such. The real story however, isn’t limited to “fake news”, as propaganda of all kinds has always been with us. For in an era where people have wildly opposing views and look to media for confirmation bias, unregulated and undisciplined digital news formats are becoming the standard conduit for dissemination. The threat of widespread misinformation aided and abetted by modern technology is complicating the consumer’s ability to get the right facts.

 

Fake news or misinformation should be identified as news based on completely false information. For instance, in March during the run-up to the French Presidential election, a story was published by a news website called lesoir.info claiming that 30% of Emmanuel Macron’s campaign funding had come from Saudi Arabia. The story was debunked but not before Marie Le Pen tweeted about it to her 1.5 million followers. The dissemination of completely illegitimate news stories like this one is a dangerous trend that has become increasingly prevalent in the last few years.

 

The main producers of this misinformation are news websites run by financially and/or politically motivated individuals. Evidenced by the instance described above in France, fake news stories can have a profound impact on everyday political discussion. News sites can generate revenue by selling ad space on their webpages. These outlets will often run outlandish clickbait headlines to generate more internet traffic and in turn more revenue.

 

The Social Media Factor

 

The threat posed by misinformation is increased dramatically by the population’s dependence on social media as a source for news. According to a Pew Research survey, 62% of American adults get news from social media, most commonly on Facebook (66% of users) and Twitter (59% of users). Sites like Facebook are the perfect hotbeds for misinformation. Individuals will often have a group of online friends who generally share similar political views. People are more likely to trust information that is passed along by a peer and so fake news stories often circulate within a friend group, like an echo chamber, without any evaluation of the information’s credibility. Alternatively, outlets producing misinformation have been able to utilize social bots to bolster attention for a story. Greater internet attention translates into a greater likelihood the story will appear on a person’s Facebook newsfeed the next morning.

 

Although social media has increased political interest and engagement amongst users, many have adopted a provincial and overly credulous approach to news media. The public has mistakenly placed its faith in sites like Facebook as its best source for news (largely due to ease of access and convenience), while more legitimate news sources have simultaneously lost credibility because of “fake news” rhetoric like Trump’s. The effect of this cycle is a more polarized and misinformed public.

 

The Trump Effect

 

There is considerable ambiguity surrounding the difference between fake news and biased news. In order for a piece of news to be considered fake or misinformation, the assertions being made have to be patently false. An article written by a committed ideologue may be blatantly biased but if the article promotes an opinion based on some set of facts it isn’t misinformation. Many people, including the leader of the Free World, seem to struggle with this notion. It is true, CNN may not like President Trump, but they do report on verified information and if false information is ever used, they will redact it as soon as possible. The same can be said for FOX news, The New York Times, The Wall Street Journal and most of the reputable news sources that make up the mainstream media. The sentiment that these admittedly biased news outlets contribute to the growing flow of misinformation available to consumers is dangerous. We are getting to the point where the only information that people trust is information that aligns with their own personal worldview (which as discussed above is readily available through social media) and depending on the source they use, could be completely false.

 

Misinformation in Business

 

Misinformation in the media is not restricted to politics. Corporations and investors have and continue to use false information to achieve financial gain. There are two main examples of this. First, companies can use bots and algorithms to create positive (or negative) reviews about a given product online. Whether it’s a hotel room or a toaster oven, many people consult internet forums to ascertain consumer feedback. Second, investors will often short a stock and then create or sponsor highly negative media content directed at the associated company. For instance, there is debate around the validity of recent reports detailing the presence of food borne illnesses in Chipotle restaurants. The latest outbreak was first flagged by a website called iwaspoisoned.com. Several powerful hedge funds pay $5 000 a month for privileged access to the site and many of these same funds did very well in the last few weeks shorting Chipotle stock. While it is difficult to clarify the credulity of negative news like this, evidently misinformation can be used to trick the market and to help unscrupulous individuals achieve considerable financial gain. That said, unlike with political misinformation, there is some legal precedent aimed at preventing the short scenario described above. What all these problems have in common is a lack of accreditation to credible sources and a “viral” lightning speed of dissemination enabled by easy access to a universal network of interconnected devices. Though difficult to conceive logistically, perhaps a system of legal deterrence aimed at the political media sphere would help in the reduction of widespread misinformation. 

 

Going Forward

 

There are three main culprits for the assignment of blame with regards to the explosion of misinformation in news media today: politicians and governments, social networking sites and search engines and, last but not least, the public itself. All three groups need to play a role in dealing with this problem.

 

Politicians must avoid spreading or lending credence to news stories that have not been thoroughly corroborated. Too often, especially during elections, politicians will use misinformation in the media to push their own agendas. These individuals know better and owe it to their constituents to be honest in political competition. Though difficult, governments have begun to pursue efforts to curb the flow of misinformation. The California Board of Education will soon unveil a plan to incorporate digital literacy into high school curriculum. The German government has introduced measures that could see individuals indicted for producing misinformation. These programs are in preliminary stages but could have an impact down the road.

 

In the wake of post-election pressure, internet giants have also taken steps to root out misinformation available on their platforms. Facebook users in Germany and the USA can now flag articles they identify as deliberately false which will then be passed on to third-party fact checkers. These fact checkers can then label the stories with a disputed prompt which all social media users would see from that point on. Additionally, both Google and Facebook have announced a plan to restrict advertisement on sites that continually publish misinformation.

 

While these strategies can and likely will help, there is still no obvious method of combating the plethora of fake and misleading news we are exposed to every day. So perhaps for the time being, our best weapon is a healthy dose of skepticism. The accuracy of the information being proposed should always be considered. What is the source? Who is the author? Is the information being put forward plausible and can it be verified by alternative news sources? This should be the bare minimum. In order to be well-informed an individual must seek out conflicting points of view to better understand the whole story. In as much as every news organization may argue otherwise, they all have at least some political bias. With that in mind, consulting multiple news outlets on both sides of the political spectrum is necessary to understanding a particular news event. For many, this process will seem tedious and inconvenient but the complete digitalization of news media has resulted in the accelerated dissemination of often inaccurate information, the segmentation of news through social media and of course the ability to produce and interact with news media with ease.  The internet has made the ocean of news content more massive and confusing, and for the time being, the onus is on the consumer to navigate its turbulent waters.

 

The Summerhill Team

Please reload

Please reload

Archive