The coronavirus pandemic and the upcoming U.S. presidential election have refocused attention on the increased spread of misinformation via social media.
Given the high stakes in both cases, the sense of concern about this problem is escalating.
The role of internet companies in allowing misinformation to proliferate is a key issue for the internet, communications and technology sector. As such, financial services companies, especially those with a holistic approach to ESG (environmental, social and governance matters) have a stake in how this debate plays out.
In the Arab Spring of 2010, social media stood out as a force for good, spreading the message of democracy. However, its role in shaping societal viewpoints is vulnerable to being exploited. According to the Pew Research Center, 20% of U.S. adults often get their news from social media. But there is growing unease over the accuracy of the content on social media and its impact on society.
While humankind has had to contend with the circulation of fake news throughout history, technology has accelerated the speed and depth to which misinformation spreads. False news is 70% more likely to be retweeted than the truth on Twitter, according to a study by the Laboratory for Social Machines at MIT Media Lab.
In some cases, misinformation can literally cost lives, and its snowball effect amid the COVID-19 crisis has been particularly troublesome. The World Health Organization coined the term “infodemic” in reference to an excessive amount of information about a problem, which makes it difficult for people to find trustworthy guidance on what to do. An infodemic can quickly spread disinformation and rumors during a health emergency. Though companies such as Facebook, Google and Twitter have been active in taking down false news related to COVID-19, the dramatic proliferation in this case comes with potential consequences that are extraordinarily dire.
The digital advertising industry is at the center of today’s misinformation epidemic. Digital advertising is a high-growth oligopoly with global revenue of about $303 billion in 2019. Google and Facebook command approximately 65% of this market. This allows content advertisers to use mainly Google- and Facebook-owned properties to drive campaigns, which can often be targeted at a micro level.
Why is inaccurate and misleading content so prevalent? Many are pointing to Section 230 of the U.S. Communications Decency Act, which shields internet content distributors from liability claims arising from user-posted content. The CDA’s broad grant of immunity is widely viewed as the foundation of the modern internet. Without its protection, risk-averse internet companies would arguably engage in censorship to protect themselves from liability.
But the wisdom of this broad grant of immunity is now in question. Lawmakers have proposed exceptions to Section 230 to penalize providers that host misinformation. Though the outcome of this debate is unknown, it seems certain that companies will be held to higher standards concerning what they distribute.
This is an issue where long-term investors can take a proactive role and exert their influence. To us, the central question from a sustainability perspective is: How do we preserve the internet as an open forum while also protecting society by curtailing abuse?
The cost of failing to take corrective action on misinformation can exponentially increase over time, ultimately even impacting institutions that serve as our bedrock. Consider how the fanning of suspicion about vaccines has led to a resurgence of measles in the U.S. and elsewhere, undermining global public health organizations.
The internet might be the greatest tool in human history for global communication, education and development, but the flood of misinformation on topics ranging from vaccines to politics poses a threat to society.
