The Economic Impact of Misinformation on Businesses

Misinformation Emerges as Critical Corporate Threat in Digital Age

Until recently, deliberate misinformation campaigns were so unlikely to cause lasting corporate damage that most companies didn’t even include them on risk registers. That calculus has changed dramatically. Today, businesses can watch their stock value plummet overnight if false narratives gain enough traction to trigger customer boycotts based on fabricated concerns about product safety, ethics, quality, or alleged ties to extremist groups.

The World Economic Forum’s latest Global Risks Report highlights government misinformation and disinformation as key short-term risks that threaten stability and erode trust in authority. For businesses, the implications are equally severe. Industries like biotechnology face particular challenges when biohackers and non-medical professionals promote unproven remedies while disparaging regulated, effective treatments.

Even more concerning, the WEF warns that some governments may actively promote misinformation about goods and services from targeted countries, hardening public perceptions and fueling consumer boycotts. This trend arrives amid already heightened geopolitical tensions that have spawned trade wars and escalating tariffs. Artificial intelligence could amplify these problems further, as engagement-focused algorithms often prioritize virality over accuracy.

Legal recourse remains limited for affected companies. In the United States, online platforms enjoy immunity from civil liability for user-provided content under Section 230 of the Communications Decency Act. Pursuing defamation claims presents another costly and uncertain path that many organizations cannot realistically pursue.

“At its worst, deliberate deception has the potential to destabilize or create financial or reputational damage,” explains Ant Moore, senior managing director in strategic communications at FTI Consulting. “Where misinformation is often fueled by false information, disinformation is characterized by a more deliberate attempt at sabotage.”

Several major corporations have already fallen victim to such campaigns. In 2016, New Balance faced intense backlash after false claims circulated that the brand aligned with far-right movements. Pharmaceutical giant Eli Lilly saw its stock drop 4.37 percent in 2022 after a fake Twitter account falsely announced free insulin distribution. The following year, Anheuser-Busch InBev’s CEO Michel Doukeris blamed social media misinformation for fueling a conservative boycott of Bud Light that slashed sales by 25 percent after the brand was promoted by a transgender influencer.

“When it comes to the risk posed to corporates, the only surprise is that this hadn’t come sooner,” says Chris Clarke, co-founder of communications agency Fire on the Hill. “Companies have been operating in an increasingly complex and globally connected landscape, with new forms of media growing in prominence. It makes information impossible to control and identifying trustworthy information harder than ever.”

The current information ecosystem – characterized by chaos, fragmentation, and diminished trust – creates fertile ground for misinformation to spread virally. Bad actors, whether foreign governments targeting economic interests, activist groups, or competitors, can exploit these conditions, making risk mitigation strategies a top priority.

Given how rapidly AI-generated falsehoods can proliferate across social media, experts emphasize the importance of real-time monitoring before situations spiral out of control. Rebecca Jones, associate director at intelligence firm Sibylline, notes that traditional monitoring approaches often miss the early stages of disinformation campaigns.

“Historically, communications and PR teams have focused their attentions on tracking comments and trends across mainstream social media,” Jones explains. “However, that is not where these disinformation campaigns begin, and arguably, by the time disinformation hits these sites, the issue has already gone viral.”

Disinformation typically originates on alternative platforms where emotionally triggering content, regardless of credibility, finds receptive audiences. These narratives may develop slowly over days or weeks before migrating to mainstream platforms and exploding in visibility. Monitoring these alternative spaces can provide critical early warnings.

“Even if it can’t be stopped – which is usually the case – hopefully such an early warning mechanism enables teams to have a plan of action in place for when it does hit the mainstream,” Jones adds.

Chris Walker of Be The Best Communications advises companies to control their own narratives: “Facts are more impressive than fiction. Gather your evidence which disproves the claim and which highlights your organisation’s commitment to doing the right thing.”

Building strong relationships with external advocates represents another effective defense strategy. Businesses can collaborate with customers, fact-checking organizations, consumer advocacy groups, and trusted media to amplify credible information. Adam Blacker, PR director at HostingAdvice.com, emphasizes the value of cultivating brand ambassadors: “You need to build a strong community of fans who love and support your brand.”

Advanced monitoring technologies have become essential in this landscape. Andy Grayland, CISO at Silobreaker, argues that traditional crisis management approaches no longer suffice – companies must shift from reactive damage control to proactive defense.

“Cyber threat intelligence solutions provide that necessary early-warning system,” Grayland says. “AI-powered tools are now essential for cutting through the noise, identifying real risks, and flagging coordinated disinformation campaigns before they gain traction.”

While misinformation and disinformation aren’t new phenomena, their impact on businesses has intensified dramatically due to the unprecedented speed and scale of digital distribution channels. “Businesses have always been vulnerable to false narratives, but the digital age and AI has turbocharged that risk,” notes Ryan McSharry, crisis specialist at PR agency Infinite.

“The question isn’t whether companies should be concerned,” McSharry concludes. “It is how they should be responding.”