Social media is the most effective tool to disseminate information, and disinformation travels the fastest. Most recently, fake news of the deadly coronavirus has been spreading like wildfire on social media, also stoking racist, anti-Chinese sentiment.
How does this happen? Fake news, which tends to be most sensational and headline-grabbing, can create virtual bandwagons with every batch of retweets on Twitter (TWTR).
According to a 2018 MIT study, false news is 70% more likely to be retweeted than true stories, which take nearly six times as long to reach 1,500 people as it does for false stories to reach the same number of people.
“Twitter’s ‘cascades,’ or unbroken retweet chains, falsehoods reach a cascade depth of 10 about 20 times faster than facts. And falsehoods are retweeted by unique users more broadly than true statements at every depth of cascade,” according to the report, which a UBS economist cited in a blog post last week.
Fake news can ‘change how people vote’
Since this study came out, Twitter CEO Jack Dorsey has said the site will ban all political ads, as part of an effort to stop the spread of falsehoods. Particularly in an election year, social media creates some of the biggest, most unpredictable risks for investors because of the fake information that can proliferate there.
“Fake news about a candidate can change how people vote. Social media makes all forms of protest easier. Companies can be targeted with social media-led boycotts,” UBS Global Wealth Management Chief Economist Paul Donovan wrote last week. “Such protests are not organized. It makes them harder to predict.”
Facebook, which has a storied history of allowing false information to proliferate across the platform, and its CEO Mark Zuckerberg, have doubled down on the company’s decision to not fact-check political ads despite the decision by Twitter to ban political ads and by Google (GOOG, GOOGL) to restrict political ad targeting.
‘More opportunities to spread fear’
Outside of false information about political candidates, social media is being used to spread fear — and misinformation — about the coronavirus. The outbreak, which originated in the Chinese city of Wuhan, is now considered a public health emergency and has over 8,200 confirmed cases.
USA Today outlined some of the social media hoaxes that have emerged about the virus, including that FEMA was proposing martial law to rein it in. As Donovan, the UBS chief economist noted, fear about the virus could cost the economy more than the disease itself.
“The recent pneumonia virus is widely compared to SARS in 2003. The economic cost of a virus is generally from the fear of the disease, not the disease itself. Seventeen years ago social media was essentially non-existent. Social media today gives more opportunities to spread fear. That fear may lead to economic change, which may be costly. The biggest problem is that economists struggle to fight these risks,” Donovan wrote in his blog post.
In response to misinformation about the coronavirus, Twitter has created a new search prompt to direct users to credible information about it.
Meanwhile, social video app TikTok has been hosting several videos that spread misinformation and falsehoods about the coronavirus. This comes despite a policy change concerning misinformation that the platform announced earlier this month, according to a new report from Media Matters, a progressive nonprofit media watchdog. Some teens are even falsely claiming that they have the virus in order to gain traction and virality.
TikTok recently removed one of those videos after The Daily Beast inquired about it.
“While we encourage our users to have respectful conversations about the subjects that matter to them, we remove deliberate attempts to deceive the public,” a TikTok spokesperson told The Daily Beast.
Melody Hahm is Yahoo Finance’s west coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.