Misinformation Emerges as Critical Business Risk for Companies Worldwide

The spread of false information has rapidly evolved from an occasional nuisance to a major strategic threat for corporations globally. Organizations can now see their business collapse almost instantly if falsehoods about their products, practices or leadership gain enough traction to damage consumer trust and impact their bottom line.

“Misinformation doesn’t just distort reality,” warns Elika Dadsetan-Foley, CEO and Executive Director at business transformation consultancy Visions. “It erodes trust, fuels division, and creates lasting reputational damage. Companies that ignore this risk do so at their own peril.”

The threat has intensified due to three converging factors: the internet’s ability to spread falsehoods rapidly, artificial intelligence’s capacity to generate convincing fake content, and consumers’ tendency to react negatively to rumors even when they don’t fully believe them.

The World Economic Forum’s latest Global Risks Report identifies government misinformation and disinformation as a key short-term risk that could undermine institutional trust and fuel instability. The report also warns of serious implications for businesses, noting that misinformation campaigns targeting specific industries could significantly hamper growth and sales.

For sectors like biotechnology, this represents a particular challenge. Biohackers and non-medical professionals can easily promote unproven health remedies while undermining regulated, safe alternatives. The WEF also cautions that some governments may deliberately launch misinformation campaigns against goods and services from targeted countries, hardening public perception and triggering consumer boycotts.

AI could further exacerbate the problem, as engagement-focused algorithms often prioritize popular content over accuracy, inadvertently amplifying false narratives.

Research from Cardiff and Stanford Universities has demonstrated that both direct misinformation (intentionally false content designed to mimic legitimate sources) and indirect misinformation (such as legitimate brands appearing on clickbait websites) can significantly influence consumer behavior—regardless of whether they fully believe the false narrative.

“Misinformation – especially when amplified by generative AI – causes damage to reputation, finances and operations. It also incurs significant legal risks to companies,” says Doil Son, Managing Partner at Korean law firm Yulchon and Member of the IBA Technology Law Committee Advisory Board.

The impact extends beyond consumer trust. False narratives can trigger stock price volatility, polarize workforces, jeopardize employee safety, and invite increased regulatory scrutiny. In recent cases, companies have experienced social media backlash after being falsely associated with extremist political movements, while others have seen their stock prices plummet after fake social media accounts impersonated them.

The sophistication of modern disinformation techniques—including deepfakes, doctored images, and AI-generated text—allows falsehoods to spread more convincingly and rapidly before organizations can respond. This has prompted companies to invest in “disinformation security” capabilities as they recognize this as a serious enterprise risk.

Verónica Volman, a senior lawyer at Argentina’s RCTZZ law firm, recommends that companies integrate disinformation scenarios into their crisis management planning. “By detecting false stories quickly, the company can respond or seek removal before the misinformation gains wide traction,” she explains.

Protective measures should include developing dedicated protocols for misinformation attacks, conducting regular simulations, investing in monitoring tools, and training employees to detect false content. Organizations should also establish cross-functional response teams bringing together communications, IT security, legal, and HR departments.

Martin Schirmbacher, an IT specialist at German firm HÄRTING, emphasizes the importance of building digital literacy across organizations. “Younger staff, in particular, tend to take search engine results or AI-generated answers at face value without adequate verification,” he notes. “Companies should establish trusted internal sources and foster a culture of verification rather than one of uncritical forwarding or resharing.”

For external threats, companies should adopt a multi-layered approach combining technological monitoring, proactive communication strategies, and legal remedies. While defamation laws can be applied when false statements harm a company’s reputation, pursuing anonymous or foreign actors remains challenging.

Major platforms like X, Meta, LinkedIn, TikTok, and YouTube have policies against impersonation and defamatory content. Under the EU’s Digital Services Act, companies now have stronger rights to request removal of illegal or harmful misinformation through improved notice-and-action procedures.

Legal experts caution that remedies vary significantly by jurisdiction. In the US, online platforms are largely shielded from civil liability for user content under Section 230 of the Communications Decency Act. The effectiveness of legal action often depends on identifying the source of the false claims—a substantial challenge in the age of AI and social media.

“In the age of algorithmic amplification, legal risk management must be as agile as the misinformation it seeks to counter,” Schirmbacher concludes, underscoring the need for companies to develop comprehensive strategies against what has become a persistent and evolving threat to business operations worldwide.