What's the real cost of disinformation for corporations?

Manipulating public perception for financial gain is nothing new. A striking example is the 1835 “Great Moon Hoax,” when The Sun, a New York newspaper, falsely claimed the discovery of lunar civilizations – boosting its sales and reputation before later admitting to the deception.

More recently, in 2013, The Associated Press Twitter account was hacked and falsely reported that two explosions had hit the White House, claiming Barack Obama was injured. Reuters said that within three minutes, the fake tweet briefly erased $136 billion of the S&P 500 index’s value.

Disinformation – especially when amplified on social media – can cause massive financial and reputational damage, leading to stock price crashes, revenue losses and consumer distrust.

A 2019 study conducted by Professor Roberto Cavazos at the University of Baltimore, in collaboration with cybersecurity firm CHEQ, estimated the annual cost of fake news at $39 billion in stock market losses and an additional $17 billion in poor financial decisions resulting from disinformation. The same report concluded that the overall financial toll was around $78 billion per year globally.

Yet in the digital age, the scale and speed of disinformation have become a significant economic threat. Today, AI-driven falsehoods spread faster and wider than ever, prompting the World Economic Forum to rank disinformation as one of the top global risks for 2025.

“No business is immune to disinformation. Once used to influence elections and undermine public figures, disinformation has become a powerful weapon to target global businesses.

“Whether a multinational corporation or a small family business, false narratives have caused serious reputational and financial damage,” said Matthew Blake, managing director and head of the Centre for Financial and Monetary Systems at the World Economic Forum.

From fake news to deepfakes, false narratives spook investors, deter customers and erode trust.

A 2020 Trustpilot study found that 89% of global e-commerce revenue is influenced by online reviews, with 49% of consumers ranking positive reviews among their top three buying factors.

False ratings manipulate buying decisions across major marketplaces, travel booking sites and review platforms. According to a 2021 study by Cavazos, fake reviews cost businesses $152 billion globally.

In a 2018 court case, a California plumbing company said that its business dropped 25% and it was forced to lay off two employees because of a competitor’s fake reviews.

In another case in Australia, a plastic surgeon claimed that his business dropped by 23% in the week after a fake review was posted.

“As long as the ad market rewards disinformation and people remain reactive to sensationalism, the global economy will face serious risks,” said Cavazos. “Without strong incentives for reform, losses will continue.”

Artificial intelligence (AI) is transforming how companies operate, but also amplifies the reputational risks they face. Even as far back as 2018, researchers at the Massachusetts Institute of Technology found that false news stories are 70% more likely to be retweeted than true ones.

This is in part because its appeal is often more emotional or novel, qualities that drive online engagement. The result amplifies reputational risks to unprecedented levels, impacting not just corporate credibility but also financial performance and long-term market value.

According to the 2024 Edelman Crisis & Risk Thought Leadership Report, eight in 10 executives are concerned about the reputational damage that AI-driven disinformation can cause, while over a third admit that their companies are not adequately prepared to anticipate, identify and manage these threats.

“In a world where the value of a company is based in large part on the trust its customers have in it, the need to protect your reputation has never been greater.

“We are entering into a new phase of corporate crisis, risk and reputation management and the tools needed to protect the business world have to evolve to keep pace,” said Julian Payne, global chair of Edelman Crisis & Risk.

In an economy driven by perception, reputation has become one of the most valuable assets for a company. Around 63% of consumers will buy the brands they trust and over 80% say they need to trust a brand before making a purchase, according to Edelman research.

The scale of the challenge is growing with the rise of deepfakes, digital content created or altered using advanced AI to produce realistic but fake images, videos and audio.

Deepfakes can be used to manipulate public opinion, damage reputations, propagate disinformation on a large scale and even steal millions of dollars from companies around the world.

A 2024 Financial Times report confirmed that a finance worker authorized $25 million in transfers after being deceived by a video call with a deepfake version of his chief financial officer.

According to a recent survey by forensics company Regula, 42% of companies highlighted identity theft as the greatest risk associated with deepfakes. In 2024 alone, it is estimated that half of all businesses were victims of deepfake attacks, resulting in average losses per incident of nearly $450,000.

Companies that underestimate the dangers of disinformation expose themselves to the reputational and financial hazards posed by it, including volatile stock fluctuations, revenue losses and costly crisis management. When trust is a competitive asset, businesses must take strategic steps to protect their reputation and economic resilience.

There is no single solution to eradicate disinformation, but early detection is crucial. Partnering with third-party fact-checkers, swift communication and AI-powered monitoring tools help track and counter the spread of disinformation before it spins out of control.

Reputation and crisis communication strategies must also be in place. Trusted spokesperson and validated response plans to react in real time are also indispensable.

Simulations and communication drills can help ensure that businesses are not caught unprepared. Engaging with journalists, influencers and trusted public figures can also be effective in neutralizing disinformation.

Given the emphasis of the World Economic Forum's Global Risks Report 2025 on the risks of disinformation, businesses should also invest in digital literacy.

Training staff to spot and report disinformation is a good practice to reduce the risk associated with disinformation. “Pre-bunking,” sharing factual information before a falsehood begins to spread, has also been effective in countering viral narratives.

The private sector is not confronting today’s evolving risks alone. Initiatives such as the World Economic Forum’s Global Coalition for Digital Safety are accelerating public-private cooperation to tackle harmful content online.

Regulation also has a growing role. The EU’s Code of Practice on Disinformation, as part of the Digital Services Act, provides a framework for mitigating online falsehoods while preserving freedom of speech.

As trust is no longer a luxury but a strategic necessity, protecting it requires vigilance, investment and cross-sector collaboration. The financial cost of inaction against disinformation is simply too high to afford.