The EU fights “fake news”

What will the EU’s code of practice on disinformation mean for tech companies?

The background

On 26 April 2018, the EU Commission released a statement on its intention to combat the spread of online disinformation - also known as “fake news”.  As part of this, the Commission initiated a consultation, gathering views from stakeholders, and asking tech companies to propose solutions.

On 16 October 2018, the EU’s Digital Commissioner announced that a number of high profile industry participants had committed to a voluntary code of practice.  These signatories were Facebook, Google, Twitter and Mozilla. 

The Commission also published an Annex on best practice, providing information on the steps that the different signatories are taking to comply.  The Annex includes details of company policies, initiatives and third party codes that the Commission and the signatories endorse. 

The development

The signatories have set a number of objectives, these include:

• removing fake accounts
• providing accessible ways for users to report false information
• improving the systems that monitor how false information is being spread
• improving the transparency of political advertising, and
• minimising the advertising revenue for companies that spread false information.

The signatories will not be subject to any penalties if they fail to meet their targets.  However, they have committed to publishing an annual report.  Third parties such as the World Federation of Advertisers have agreed to verify their progress.

Whilst there aren’t any fines or sanctions, signatories can be asked to withdraw if they are considered to be acting in a way which goes against the code.

Why is this important?

The Commission has stated that it views the code as a positive first step.  However, it is willing to regulate the industry if the situation doesn’t improve.  The Commission’s efforts come within the context of the European Parliament elections in May 2019.

Perhaps most importantly for tech companies, the last few years have shown that the reputational damage of fake news and data scandals is considerable.  Advertising revenue and share prices can be hit if tech companies are not seen to be taking steps to minimise these issues.  Being asked to withdraw from the code or being “named and shamed” by the Commission could have a considerable negative impact.

Any practical tips?

For the signatories, the code represents an opportunity to cultivate a more positive public image around how they are dealing with fake news and data issues.  In this sense, it should be beneficial for the platforms both to make the changes and to let customers and advertisers know that they are doing so.

It also provides a potential way for the industry to avoid further regulation.  If the Commission is satisfied with the progress that is being made, it is considerably more likely to forego passing regulations in the area – and regulations of any type would inevitably reduce the discretion and flexibility currently available to tech companies.