MISINFORMATION ONLINE

While the Internet was hailed by business leaders, activists, researchers, and policy makers alike for proliferating and democratizing information as never before, many observers remained cognizant of a danger inherent in such rapid and widespread movement of information; namely, the potential for misinformation to cause serious damage. Misinformation online assumes myriad forms, such as phony business rumors to spur stock activity, bogus quotations or actions attributed to public figures, fabricated medical breakthroughs citing names of respected or nonexistent researchers, social statistics citing anonymous government reports, malicious rumors designed to defame individuals, vengeful flames against companies from disgruntled customers or employees, urban legends, and so on. Tools of the Internet misinformation trade include Web sites, emails, postings on message boards, chat rooms, cybersquatting, and other methods.

Providing individuals with a nearly limitless reservoir of information just a mouse-click away, the power of the Internet for altering social life has been undisputed. The danger, however, is that left unchecked that power could produce extremely negative effects if the information that is shared and acted upon happens to be false, slanderous, malicious, or mere rumor. The old adage that "a lie can travel halfway around the world before the truth has got its boots on" was often cited as a summary of online misinformation, and in many cases the metaphor rang true, as strategically placed misinformation was established as truth by the time the affected parties were even made aware of it.

The anonymity of the Internet was a primary impetus to misinformation, since accountability is minimal comparable to print media, and being a vastly younger medium, the Internet has yet to produce clear mechanisms for making critical distinctions and methods for checking credibility. Legitimacy is often garnered by the simple measures of professional-looking Web page design and sophisticated graphics, which, while clearly a mark of know-how, were well within reach of virtually any Internet user. Since anyone with access can make a claim on the Internet without restraint, the potential for misinformation to be posted and spread is greatly expanded.

Journalism as a profession suffered numerous setbacks as a result of online misinformation, as reporters found it all too easy to build their reporting and columns on the basis of information, often ambiguous or outright false, they retrieved off the Internet. One widely publicized incident occurred when a Boston Globe columnist was suspended from his post for four months for printing an article without disclosing that he had simply reprinted the contents of an e-mail that was being widely distributed on the Internet at the time; to make matters worse, the information therein, about the fate of the signers of the Declaration of Independence, was filled with factual errors.

Since information on the Internet comes in all varieties, from official documents to gossip, researchers, journalists, and others needed to develop discriminatory skills for retrieving and disseminating news and facts derived from the Internet. In the print, radio, and television worlds, getting information to masses of people quickly requires an enormous amount of capital backing. But one of the Web's most highly touted virtues—its exceptionally low barriers to entry—was also one of the main ingredients in the proliferation of online misinformation. With little invested in their information and with the Internet's anonymity negating the necessity of maintaining a solid reputation, intentional purveyors of misinformation have little to lose, and often find much to gain, in spreading false information.

Time being of the essence in journalism, the temptation for journalists to conduct their research on the Internet rather than go through private libraries—and many newspapers and magazines have closed down their libraries in recent years in favor of the Web—is particularly strong, since it enables them to track down information in seconds or minutes that it might take hours or days to accumulate through traditional channels. Clear guidelines and professional scrutiny are all-important in these cases, however, since the Internet can just as quickly lead to the spread of misinformation. This often means that journalists must combine Internet research with traditional methods, such as calling original sources for verification or consulting books from public libraries.

The Securities and Exchange Commission (SEC), meanwhile, busied itself in the late 1990s and early 2000s with developing new investigative methods to crack down on individuals, companies, and investors who were attempting to deceive online investors by engaging in securities fraud. There were numerous reports through this period, for instance, of individual investors getting rich by floating a rumor about certain stocks early in the day on investing-related Web sites, allowing the fabrication to mushroom and spur other investors to act accordingly, then buying or selling those same stocks later in the day to their advantage; in other words, defrauding other investors and relying on herd-like investment patterns to profit from intentional misinformation. One of the most infamous such cases resulted in the arrest of a 23-year-old El Segundo, California man who made $242,724 in profits by issuing a fabricated press release about the Costa Mesa firm Emulex Corp., which resulted in bad publicity that caused the firm's stock to plunge by 62 percent.

The dissemination of business and financial data on the World Wide Web troubled business leaders worried about the potential for misinformation to spread and accumulate damage as its effects on investors and others move through the economic system. To counter such potential threats, the International Accounting Standards Committee (IASC) issued a study titled "Business Reporting on the Internet," in which, having scrutinized 660 corporations in Europe, Asia-Pacific, North America, and South America, it called for codes of conduct to be applied to the publishing of business and financial information online.

The study reported that "the idiosyncrasies of the electronic medium will create problems in financial reporting that were not conceivable under the print medium." These idiosyncrasies included the ability for instantaneous reproduction and dissemination across wide geographical territory. Under these conditions, any misinformation, intentional or otherwise, especially when combined with perpetual access to rapidly shifting financial and business markets in a global economy, could rapidly produce a ripple effect that disrupts the efficient workings of economic systems, potentially with drastic effects. Thus the study encouraged securities regulators, national and international accounting firms and standards organizations, software companies, business publishers, and information intermediaries to collaborate on the development of stringent global language and criteria for electronic business reporting.