Fake news articles spread over the Internet now account for an economic loss of about $78 billion a year, according to new research conducted by a University of Baltimore economist and AI and cybersecurity company CHEQ.
The CHEQ report, “The Economic Cost of Bad Actors on the Internet,” commissioned University of Baltimore economist Professor Roberto Cavazos to analyze economic data across a variety sectors in an effort to determine both the direct and indirect annual monetary damage caused by websites that propagate false information.
The findings suggest that fake news has resulted in annual stock market losses to the tune of about $39 billion. Consumers additionally lose about $17 billion a year due to misinformation that influenced their financial decisions, according to the study.
Companies that are the subject of targeted misinformation spend about $9.5 billion a year in reputation management fees and assorted resources in an attempt to defend their reputations, and misinformation in the health world costs about $9 billion each year (the anti-vaxxer movement drives most of that cost, as does fake news surrounding climate change).
|The annual global cost of the fake news crisis.|
The study also found that businesses will lose about $3 billion each year from online platform safety efforts, and brands lose about $250 million annually from unwittingly running ads alongside fake news content that undermines their messages.
Altogether, the study concludes these losses amount to a global total of about $78 billion.
“So long as the ad market incentivizes the production and fake news and it remains human nature to be reactive to news, then the global economy will continue to be at severe risk of harm,” the study’s authors concludes. “The disincentives to reform point to sustained economic losses for some time.”
Political races are also dramatically affected by fake news. About $400 million are spent on fake political advertisements each year, with “at least $200 million” expected to be spent on fake news in the upcoming 2020 U.S. presidential election, according to the study.
The study’s authors also noted their estimates are “conservative” and reflect only basic direct costs, as “the true cost” of fake news “extends well beyond media expenditures.”