Labour's Keir Starmer had a lot to explain when a video of him surfaced online in which the politician was seen verbally abusing his staff. Or was he? Instead of a mea culpa, what followed was a statement by the party on the dangers of misinformation leading up to the UK general elections. As it turns out, the video of a raging Starmer was fake, fabricated with AI-based deep fake technologies, which are becoming hardly distinguishable from real material. With a spectacular rise in both AI capabilities and public access to these technologies, anyone with a computer can now create videos and articles of anyone doing practically anything. That this is used maliciously in politics is dangerous but nothing new. We saw Russian interference during the 2016 US presidential elections, as well as more recently in the buildup to the 2024 European elections. However, the harmful effects of fake news are increasingly felt in the private sector as well. Both firms and individuals are targeted with misinformation campaigns, severely harming their business.
The power of misinformation was felt strongly by assets management giant BlackRock in January 2019. In the early hours of the morning, BlackRock chief Larry Fink's annual letter to CEOs was published. In a shift from the investment company's traditional stance on the issue, Fink seemed to announce a drastically increased focus on climate-supportive ESG investing. More specifically, the letter announced that ESC screens would be added to all its exchange-traded funds, while the company would also divest from coal companies in all of its actively managed funds. Completed with Fink's signature, the letter came as a shock to the investing world, causing fluctuations worth hundreds of millions of dollars in BlackRock's share prices. Only a couple of hours later, when BlackRock realized what had happened, they released a statement contradicting the letter. The letter turned out to be fake, and Larry Fink's actual yearly note would only be published later that day. The senders were never uncovered, but rival ESG investment groups received the fake news with encouraging social media posts. Although, due to its enormous size, BlackRock was able to cope with these fluctuations, it shows how targeted misinformation can almost instantly evaporate large sums of money on the stock market.
That deliberately spreading fake information about rival firms can be a tool in strong competition markets was awkwardly shown by Samsung over a decade ago, in 2013. Facilitated by the anonymity of our digital world, allegations against the Taiwanese branch of Samsung started in April of that year, when claims surfaced that the company had taken to online forums and websites to publish negative reviews about their competitors' products. Taiwanese consumer electronic company HTC was the main target of this misinformation campaign, with their mobile phone department being maligned specifically. Several months later, Samsung was indeed found to have been behind a large amount of anonymous online reviews with the intention of damaging their competitor's business. They were consequentially taken to court and fined by Taiwan's Fair Trade Commission.
A similar case of misinformation being targeted against an individual as a tool for tilting the scales in a business dispute was recently seen in the case of Gaurav Srivastava, a prominent American businessman, and Dutch oil trader Niels Troost. Troost has been accused of running a negative online reputation campaign against his former business partner, Gaurav Srivastava. Troost is being sued by Srivastava for allegedly forging documents and submitting these fake documents to authorities to take control of the Paramount Energy commodities trading firm illegally. It has become apparent that Troost has sought to justify his actions by placing a series of misleading sponsored articles online. These articles have a series of uncorroborated claims, such that he was conned by Gaurav Srivastava, who, according to Troost at least, represented himself as a CIA agent capable of preventing Troost's sanctioning in the US in exchange for holding half his company ownership (Troost and the operator of his company's UAE subsidiary, Francois Edouard Mauron, are sanctioned in the UK and reports have surfaced that he may be similarly sanctioned in the US). Although, in this case, sophisticated AI technology has yet to be employed, it is clear that paid articles are spreading falsehood.
What is certain, however, is that the private sector will increasingly be affected by the massive and growing stream of information in our digitalized world in similar ways. As social media platforms continue the use of algorithms that facilitate the spread of fake news and AI-based technologies flourish in recent years, the boundaries between what is true and what is not will continue to blur. The harm done by this lack of clarity cuts two ways in the private sector, to the firms that are affected, but also to consumers.
As the necessary regulations to prevent misinformation from affecting society in these ways are still lacking, it cannot be emphasized enough how widespread the impacts already are and will continue to be. Until regulations are in place, consumer awareness of these trends remains the best tool available to counter them and to preserve a sector where facts are clearly distinguishable from fiction. With this awareness, lawmaking institutions can be pushed towards formulating comprehensive regulations to, on the one hand, fight the spread of misinformation and, on the other hand, prove the authenticity of factually correct publications.
