The increased level of competition, the economic and political interests of states resulting in meddling in the politics of others and the need for financial gain are the main reasons for the growth of misinformation. Targeted companies, in the absence of protocols to counter Fake News campaigns, risk irreparable financial and reputational losses in many cases.

Globally, misinformation causes about $78 billion in financial losses annually, and nearly 901TPTP3T of investors consider the phenomenon a major risk, according to a study by Israeli-based cybersecurity firm CHEQ and the University of Baltimore.

However, in Romania, awareness of this phenomenon among company decision-makers is very low. Currently, less than 1% of companies in Romania take the Fake News phenomenon seriously and have procedures in place to follow in case they are the target of such campaigns, according to an analysis by the Corporate Intelligence Agency, a risk management company dedicated to business.

"There is now an epidemic of fake news that is claiming more and more victims. Thus, misinformation has gradually insinuated itself as a potential strategy of the private sector, which, in the pursuit of profit or to strengthen its market position, uses this tool to damage the reputation of competitors, influence the market value of listed companies or as a negotiating tactic in transactions, mergers or hostile takeovers," says Gabriel Zgunea, CEO of Corporate Intelligence Agency.

Misinformation is thus an elitist component of the mechanism to deceive individuals and corporate interests that can be addressed in the fraud risk mitigation process.

In this regard, according to a survey conducted in 2021 by the Association for the Prevention and Combating of Fraud in Romania among Romanian companies on general fraud risk awareness, only 2 out of 10 companies said that they use the services of specialists to draft fraud prevention procedures, but focusing only on the basics: knowing the business partner, making payments, gifts received from third parties, etc.

The impact of Fake News on companies 

Disinformation campaigns have well-defined strategies, with targets and objectives to be achieved, using effective means of dissemination, which send impactful messages that remain imprinted in the collective mind for a long time. Fake news has also grown as a consequence of technological developments, the multitude of channels for communicating or disseminating information (real or not), and the tendency of some to consume news of increasingly poor quality (junk news).

In the US, a simple campaign to intoxicate the public with fake news about a particular brand's products led to a fall in the company's shares and a press scandal at a time when the company was preparing to merge.

In a similar case in Romania a few years ago, a bank's image was damaged after rumors surfaced in the market that the bank was cashless and people were storming ATMs/ATMs to withdraw money from their current accounts or deposits.

On the US stock exchange, a simple "pump and dump" scheme using Fake News generated significant losses, but also gains for the authors of fake news about a listed company.

In 2019, a UK bank suffered a 11% drop in shares due to the viralization of fake messages on WhatsApp and Twitter about the bank's liquidity and other financial problems.

Also, given the laxity of the unregulated crypto market, a recent news story about a possible "pump & dump" scheme describes the action of an influential US businessman to promote one of the virtual currencies by simply announcing a potential acquisition, not followed by the actual purchase. This led to a significant rise in the value of the coin, followed by a crash in the immediate aftermath.

What companies can do to limit the effects of a Fake News campaign

These are just a few examples showing the scale of the phenomenon and the consequences of misinformation. In this context, according to Corporate Intelligence Agency specialists, corporations should identify their vulnerabilities, assess what the consequences would be and which points are most likely to be affected by the spread of false information. Then, after these steps have been completed, companies need a response strategy to make them less vulnerable to the phenomenon.

Depending on the domain, risk and exposure, it is necessary to have an internal or external mechanism in place within each corporation capable of responding quickly to this type of threat, within a maximum of one hour from the time the Fake News attack occurred, and to manage future communication to minimize risk and exposure on the topics in question. Implementing a real response plan, involving competent and exemplary coordination, is one of the few winning options.

Guide to identifying sources of truthful information

• If a piece of information seems exaggerated, untrue or "too good to be true", it should be checked from at least 3 sources or even involve asking for official views;

• More often than not, official communication channels should be the main generator of information, as well as the source for information companies. In this respect, a model could be: if we don't want to buy counterfeit products, why would we want to consume news "counterfeited" by someone to achieve their goal;

• When certain information cannot be verified, it is important that we do not contribute to the spread of information and unwittingly become co-authors or accomplices to misinformation. If the information comes from a particular country/area, known for this kind of news, it is obvious that that information needs to be further verified.

"Ignoring the Fake News phenomenon on the grounds that this cannot happen to us is as damaging as the attitude to corporate fraud. Fake News is also a form of fraud, against the society we live in, but also against corporations that are facing new asymmetric threats, specific to the immersion in digitalization and the evolution of technology", adds Gabriel Zgunea.

Corporate Intelligence Agency is a risk management company dedicated exclusively to the business environment, specialized in identifying potential vulnerabilities, risks or business opportunities of the companies that use its services.

Corporate Intelligence Agency offers premium solutions in Applied Intelligence, Competitive Intelligence and Risk Management, by using the latest tools and technologies, along with the dynamism, creativity and, above all, the high level of expertise in the intelligence field of the experts in the team.

Corporate Intelligence Agency services are addressed to all companies and corporations that understand the importance of using professionals to generate reliable information that can inform decision-making processes, providing knowledge on socio-political phenomena or conjunctures, markets or situations of interest, as well as reducing risks or vulnerabilities in areas that may affect the company's economic and/or reputational interests.