United States: Fake And Consequences: Weathering The Reputational Risks And Financial Fallout Of "News" That Abuses

Last Updated: August 19 2017
Article by Kimberly Buffington

In today's political climate, the phrase "fake news" gets bandied about quite a bit. In addition to its more traditional meaning—news that is false, purposefully misrepresented or outright propaganda—fake news is also sometimes used to characterize any news published that the target or subject of disagrees with or dislikes. As the recent election cycle demonstrated, the proliferation of fake news has become an issue with which candidates and businesses alike must contend. But while the extent to which targeted misinformation can swing an election or otherwise affect a political environment is open to debate, for businesses, an ounce of fake can yield pounds of reputational and financial damage. The advent of social media has both catalyzed and weaponized the danger posed by all forms of fake news, and like so many technology-powered issues, the law lags behind in enacting new protections for businesses and individuals alike. Fortunately, some old causes of action may offer remedies for injuries inflicted by fake news stories.

Keeping It Fake
It's not difficult to find examples of how the modern, online iteration of fake news can harm a business. Take the series of events now referred to as "Pizzagate," in which publishers in Macedonia started rumors about Hillary Clinton's involvement in a child trafficking ring located in the basement of a pizzeria. These fake publications may have influenced voter perceptions of the presidential candidate, but it led to even more severe consequences for the pizzeria when, in December 2016, a man who read the false publication repeatedly fired shots at the pizzeria. No one was hit by the gunfire during the incident, but the pizzeria lost employees and customers because of the false publication and the violence it triggered.

Damage via false reporting is not just a North American phenomenon. In London, an Indian restaurant called Karri Twist, began receiving calls from people accusing it of selling human meat. During one of the calls, a customer revealed that this information was posted on Facebook. Shrina Begum, the restaurant's owner, tracked down the source of the rumor on a fake news site called Channel23news.com. The fake news story indicated that nine bodies had been found on the restaurant premises in the freezer, and that the owner had been arrested for selling human meat. Although the article's credibility was immediately suspect due to the numerous spelling errors, it spread widely across Twitter and Facebook.

Making matters more difficult for business owners and authorities wanting to combat the spread of fake news? Channel23News.com is only one of many such sites propagating such content. BuzzFeed used domain registration records to identify two separate networks that together own at least 30 fake news sites that have published thousands of fake articles in multiple languages over the past year. The sites have collectively earned over 13 million engagements on Facebook in the past year. The articles have equally targeted politicians and businesses.

The Real Profit Found in Fake News
But why create fake news? Some people create fake news to hoax others or prank their friends. Others use it to cyberbully. And of course, the use of misinformation as propaganda is widespread. But the owners of fake news sites are mainly in it for the money. Successful fake news posters can earn anywhere from $5,000 per month to $3,000 per day by relying on self-service ad technology widely available online. Whether these false stories are created for fun, mischief or money, they can become a nuisance to businesses trying to protect their brand and maintain their good reputation.

In a Target-Rich Environment, What Is a Target to Do?
The legal field has not caught up with the fake news epidemic. Various jurisdictions are in the process of trying to crack down on fake news publications. Germany's recent social media bill fines social media platforms up to 50 million euros for failure to comply with takedown requirements. In California, legislators are working to draft a bill that addresses the fake news epidemic without trampling on First Amendment rights to freedom of speech and expression. (The American tradition of protecting speech may account for why some Americans are more hesitant than Europeans to embrace laws that crack down on the fake news.)

As states struggle over the language for new laws, businesses injured by fake news stories may find refuge in existing laws. Under tort law, a party may recover damages to his/her reputation when another makes false statements causing injury to his/her character. Written defamatory statements may be actionable as libel. A successful libel suit typically requires publication of a defamatory statement where the targeted person or entity was identified in the material and suffered injuries because of it.

Businesses injured by fake news stories may also be able to state other claims if the articles misappropriate the businesses' intellectual property in the fake story. Improper use of a businesses' trademark in a fake news story could subject the author and publisher to liability. Unfair competition laws might also attach liability. In some states, liability may attach for improperly using an individual or entity's name and likeness for commercial purposes.

Despite the availability of these legal tools, there is a significant barrier: Section 230 of the Communications Decency Act (CDA). The CDA protects providers and users of interactive computer services from liability as publishers of information provided by third parties. This means that social media platforms such as Facebook and Twitter are likely immune from suit based on content that was posted by their users. Thus, if a business is harmed by fake news, the site where it is posted or published may not be liable, and it may be difficult to track down the original author/publisher. Fortunately, many platforms, including Facebook and Google have taken steps to crack down on fake news postings. Nonetheless, for now the use of fake news as a weapon to harm a business is going to remain difficult to anticipate, inoculate against or remedy for one simple reason—there's money to be gained.

(Summer law clerk Ashlee Hamilton contributed to this post.)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.