The fake media shakedown

The fake media shakedown
Donald Trump made the phrase "fake news" famous, but things have moved on online. Fake media set up websites with the sole purpose of shaking down the rich and powerful by publishing damaging stories that are also used as a tool by their business rivals. / bne IntelliNews
By Ben Aris in Berlin December 13, 2023

Sometimes in the world of PR, it is not so important to secure good coverage and heap praise on your own business, as it is to discredit a competitor. Even the world’s largest companies are not adverse to smearing their rivals. For example, an article in The Washington Post claimed in 2022 that Facebook’s parent company Meta was paying a US big consulting firm in the country to orchestrate a nationwide campaign seeking to turn the public against TikTok.

Media outlets occasionally deviate from the journalistic principles of impartiality to take one side or another in a debate. The coverage of Donald Trump in the United States is a famous example. Trump, in turn, struck back and poured fuel on the “fake news” fire, routinely countering criticism, accusing the mainstream media as pushing “lies”. If you sling enough mud some of it will stick.

The use of black PR is well established in Eastern Europe, where it is known as kompromat, a term that is slowly filtering into the English lexicon and is becoming part of what businesses expect in the media landscape. Not only do businesses routinely pay newspapers to run compromising articles to wound a rival, but there is a raft of websites that have been created specifically to host these articles as a business model, one senior Russian businessman told bne IntelliNews, who has been the victim of one of these campaigns that ran for years.

Fake news continues to flourish, but has evolved to the next level with the growing number of “fake media” publications, established to shake down the rich and successful and that are increasingly appearing in the West as well.

Fake media are entirely fraudulent websites, designed to look like genuine media outlets, but which have nothing to do with real news. Their sole purpose is not to report the news, but to make money through ruining the reputation of business leaders or politicians.

Such sites charge serious sums several thousand dollars in exchange for publishing compromising materials on rivals, with payments usually made in cryptocurrency to obscure the identity of the participants.

As they produce nothing of interest, fake media publications are small with few readers. However, the articles they published are not designed to attract a readership, but to simply be highly visible to Google. Capitalising on sophisticated search engine optimisation (SEO) tools, their nefarious articles appear at the top of Google search results for a target’s name.

Businessmen and lawyers interviewed by bne IntelliNews for this article report these articles can cause serious problems. One victim of a recent smear campaign, accused of being an arms dealer, told bne IntelliNews anonymously that banks immediately froze the company accounts while it investigated the charges. It only takes one accusation on an obscure website to trigger a bank’s compliance department hold order until it is satisfied the claim is false.

Another favourite tactic is to unfairly accuse people of corruption or of dodging international sanctions charges that pose a significant threat to businesses, particularly in emerging markets and could attract the attention of bodies like the US’ Office of Foreign Assets Control (OFAC). If serious accusations like these exist online even those completely lacking in evidence the process of gaining approvals can become near impossible.

The fake media outlets are well aware of the trouble they can cause and can also play both sides of the fence, not only taking money to print an attack piece, but also shaking down the victim to take the piece down again. The victim can ask for the material to be deleted, but for a hefty fee, often up to $20,000, according to PR companies, speaking to bne IntelliNews, that have been hired to fix these problems.

Some targets pay the blackmailers; some don’t. There is always the risk that after the first payment there will be requests for more, as the scammers often operate a network of sites that replicate material.

Sometimes fake media sites are shut down, others change their domain name and pop up elsewhere. But some can carry on pretending to be genuine outlets for years untouched and continuing to publish false claims without bearing any responsibility, say industry participants.

Because of its virtual existence, it is difficult to sue a fake media or have it closed. Fake media operate in an unregulated “grey” zone, as they are not clearly in any jurisdiction as they have no physical presence.

"The balance between managing information flow in a crisis responsibly and at the same time [fully] respecting individual rights on freedom of speech or protection of reputation is very challenging to get right,” says Olaf Halvorsen Rønning from Elden Law Firma.

Earlier this year the Ukrainian outlet Ukrainian News published an investigation into fake media. They discovered a set of common themes: a lack of legal information about the outlet (ie who to complain to or sue); and a lack of links to original “sources” on which the articles are supposedly based. They are also often written under the name of fake journalists, using either completely made-up personas, or the names of real journalists without their knowledge.

As part of its investigation, Ukrainian News made a “test purchase”, contacting several fake media outlets by email to find out how to go about publishing fake claims.

One outlet, Talk-Finance.co.uk, offered an article for 0.05 bitcoin around $1,700, according to Ukrainian News. Many of the fake media outlets were connected, offering to place negative materials simultaneously across dozens of sites at once.

Talk Finance has been operating since 2018, posing as a British news site, focused on business. At first glance, it is difficult to distinguish it from a real news site. It has a decent design, based on a regular WordPress website, and could easily be confused for a genuine news outlet. It regularly publishes what appear to be genuine news articles and uses professional photos.

However, digging deeper, Talk Finance does not disclose an address, phone number, data about where or when the business was registered or who owns or created the domain name. The location of the site’s servers is hidden by CloudFlare security and the only contact on the site is a generic Hotmail email address.

The site publishes articles under the name of four journalists, whose names coincide with the names of real and well-known business journalists who write regularly about investing.

bne IntelliNews got in touch with these journalists, all of whom are also associated with other legitimate publications or investment and consulting firms, to ask them to confirm if they write for Talk Finance.

One of the four journalists, David Stevenson, replied: “Thanks for the email. Never heard of them looks like they aggregate other people's articles. Nothing to do with me.”

Most of the materials under their names are neutral news reports on the topics of economics and politics. There are pieces that appear to have been slightly rewritten from major news agencies, with the help of AI.

The goal of publishing such neutral articles is purely to boost the credibility of the defamatory articles that are published alongside them. The compromising materials themselves mimic journalistic articles, and mix genuine, verified information alongside slander.

Such sites were actively used to denigrate US politicians during election cycles during the 2010s. These days, business leaders from the countries of the former Soviet Union (FSU) and other emerging markets are frequently targeted.

“Entrepreneurs from the US and Europe are well known to the public, so it makes no sense to try to create false narratives about them general readers and compliance departments are unlikely to believe them,” says Anton Imennov, an attorney and a legal consultant in New York, with extensive experience in the FSU region.

“But businessmen from the former USSR, who for many years did not seek publicity for their personal and business lives, often find themselves targets for such slanderous campaigns,” he added.

Today, traditional media outlets have stopped being the only source of information. Fake sites are pretending to be genuine media outlets, and social media is flooded with unverified information. In such an environment, it has become increasingly difficult to distinguish truth from lies.

The case of Guy Babcock which made the pages of the New York Times and other international media outlets is an example of the toll the fake media phenomenon can take. A troll targeted Babcock, who lived in the UK, and his family with an aggressive online campaign that called him a “scammer”, “thief” and “paedophile.” After months of anonymous posts and news articles, it turned out the campaign had been orchestrated by a single ex-employee of his company, The New York Times (NYT) reported.

There are dozens of fake media outlets in addition to Talk Finance such as Trinity Bugle, Chicago Morning Star and Ruscrime that continue to operate with apparent impunity. And the problem could become worse with the advent of AI that can quickly and effortlessly produce reams of apparently professionally written content, based on legitimate articles but which don’t breach copyright law, into which slanderous titbits can be slipped. These can then be amplified using social media.

As the quantity of unreliable information online will continue to expand, and fact-checking has already become harder.

However, some practical judicial tools are already available. In Europe, the Digital Services Act (DSA) came into force in August. It is designed to ensure the technology giants like Google, Facebook and Twitter take measures to moderate illegal content on their platforms. The hope is that with this in place, it will become more difficult for defamatory articles to rise to the top of search results.

“The DSA is Europe’s response to fake news and illegal content spread via online platforms,” Mr Rønning said.

“Its main feature is the introduction of regulation over when and how online platforms must respond to illegal content … the DSA sets out liability for illegal content and obligations on how such content should be handled. Compensation procedures among other legal instruments under the DSA can be used by lawyers defending their clients’ interests when they discover harmful allegations spread on such platforms.”

“The new regulation contains a general regulation of internet services. For what is relevant with reference to the tools available, we would like to point out that the new regulation establishes a series of duties of attention and diligence for providers of intermediary services (particularly hosting), also against the problem of disinformation and this according to a strategy aimed at preventing also intervening on the subjects who have greater influence in the network the occurrence of illicit situations,” adds Matteo Gozzi from Italy, partner at Danovi & Giorgianni, a law firm expert in media law.

Gozzi says the DSA lays out for internet providers and other intermediaries a duty of collaboration with the judicial authorities with respect to a number of things, including:

(1) orders for the removal of illegal content (articles 9-10);

(2) a system of out-of-court dispute resolution (articles 20-21);

(3) suspension of the service is expressly provided for in the event of illegal content (art. 23);

(4) mechanisms are provided for responding to crisis situations (art. 36);

(5) the development of codes of conduct (art. 45);

(6) control powers vested in the Member States and the Commission and coordination activities (articles 56-57);

(7) a European Supervisory Committee is established (art. 61);

(8) a power for the Commission to intervene urgently even in relation to very large platforms/search engines (art. 70);

(9) very high economic sanctions are introduced against very large platforms/search engines (art. 74)”.

“But how, in practice, this will balance the interests of freedom of speech with the rights of people to be protected from illegal defamation remains to be seen,” concludes Rønning.

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