Fake news is more than just a label: It's wasting billions of dollars annually, according to a new report.

Ad cybersecurity firm CHEQ, in conjunction with economist and University of Baltimore professor Roberto Cavazos, estimates $78 billion dollars each year is lost due to misinformation.

"'Fake news' isn't just a term coined by a politician," CHEQ CEO Guy Tytunovich told Cheddar. "Fake news isn't just buzz. Fake news isn't something that was born recently in terms of being anecdotal. Fake news is a major, major problem. At these figures, fake news is almost controlling our lives, who we vote for, what we decide to do, what we consume, and so on and so forth."

Further breaking down the figures, the team estimated:

In addition, the report estimates $400 million a year is spent around the world advertising political misinformation. It projected $200 million alone will be used to promote fake news narratives during the 2020 U.S. presidential election cycle.

One of the largest losses tied to one fake news incident was estimated at $300 billion. In December 2017, ABC News falsely reported Michael Flynn would testify that President Donald Trump instructed him to contact Russian government officials during the 2016 election campaign. The effect was especially pronounced on the U.S. stock market, and shares plummeted an estimated $341 billion on the S&P that day. However, the news story was corrected after the trading day to say Flynn would say those commands happened after the election, allowing the market to bounce back to a loss of only $51 billion.

The report used CHEQ's proprietary data on ad fraud and bots, public stock market data, news reports, and other publicly available information to determine the monetary value. Direct factors like ad spend precipitated by fake news and stock price drops were included. It also considered indirect costs, like expenditure or investments made by companies in order to combat these false narratives such as Twitter's acquisition of misinformation-targeted machine learning startup Fabula AI in June.

Conversely, it didn't take a lot of money to propagate misinformation. One study cited in the report from Trend Micro found that $55,000 was enough to discredit a journalist, while $400,000 could influence policy changes on trade agreements.

"The only cure is … companies being very aware of the phenomenon and investing heavily in anything to do with PR and advertising and tools to make sure that messaging is controlled by the corporate," Tytunovic explained.

"[But] other than that, it's not just corporate," he added. "Consumers need to take everything they read with a grain of salt. I'm a huge fan of Facebook and Twitter … and still, I don't consume my news from posts on Facebook and Twitter. These are not reliable news sources."

Share:
More In Business
Hard pass, Cold brew, Dad bod: Merriam-Webster adds 5,000 new words
Merriam-Webster has fully revised its popular “Collegiate” dictionary with over 5,000 new words. They include “petrichor,” “dumbphone” and “ghost kitchen.” Also “cold brew,” “rizz,” “dad bod,” “hard pass,” “cancel culture” and more.
Poll: More Americans think companies benefit from legal immigration
A new poll finds U.S. adults are more likely than they were a year ago to think immigrants in the country legally benefit the economy. That comes as President Donald Trump's administration imposes new restrictions targeting legal pathways into the country. The Associated Press-NORC Center for Public Affairs Research survey finds Americans are more likely than they were in March 2024 to say it’s a “major benefit” that people who come to the U.S. legally contribute to the economy and help American companies get the expertise of skilled workers. At the same time, perceptions of illegal immigration haven’t shifted meaningfully. Americans still see fewer benefits from people who come to the U.S. illegally.
Tylenol maker rebounds a day after unfounded claims about its safety
Shares of Tylenol maker Kenvue are bouncing back sharply before the opening bell a day after President Donald Trump promoted unproven and in some cases discredited ties between Tylenol, vaccines and autism. Trump told pregnant women not to use the painkiller around a dozen times during the White House news conference Monday. The drugmaker tumbled 7.5%. Shares have regained most of those losses early Tuesday in premarket trading.
Load More