The Digital Transformation of News Media and the Rise of Disinformation and Fake News

Digital Economy Working Paper 2018-02, Joint Research Centre Technical Reports

57 Pages Posted: 10 May 2018 Last revised: 3 Jun 2018

See all articles by Bertin Martens

Bertin Martens

Joint Research Centre

Luis Aguiar

University of Zurich - Department of Business Administration

Estrella Gomez-Herrera

European Commission Joint Research Center

Frank Mueller-Langer

European Commission, Joint Research Center; Max Planck Institute for Innovation and Competition

Date Written: April 20, 2018

Abstract

This paper contains an overview of the relevant economic research literature on the digital transformation of news markets and the impact on the quality of news. It compares various definitions of fake news, including false news and other types of disinformation and finds that there is no consensus on this. It presents some survey data on consumer trust and quality perceptions of various sources of online news that indicate relatively high trust in legacy printed and broadcasted news publishers and lower trust in algorithm-driven news distribution channels such as aggregators and social media. Still, two thirds of consumers access news via these channels. More analytical empirical evidence on the online consumption of genuine and fake news shows that strong newspaper brands continue to attract large audiences from across the political spectrum for direct access to newspaper websites. Real news consumption on these sites dwarfs fake news consumption. Fake news travels faster and further on social media sites. Algorithm-driven news distribution platforms have reduced market entry costs and widened the market reach for news publishers and readers. At the same time, they separate the role of content editors and curators of news distribution. The latter becomes algorithm-driven, often with a view to maximize traffic and advertising revenue. That weakens the role of trusted editors as quality intermediaries and facilitates the distribution of false and fake news content. It might lead to news market failures. News distribution platforms have recently become aware of the need to correct for these potential failures. Non-regulatory initiatives such as fact-checking, enhanced media literacy and news media codes of conduct can also contribute.

Keywords: fake news, disinformation, online news markets, social media, algorithmic news distribution, news aggregators

JEL Classification: L82

Suggested Citation

Martens, Bertin and Aguiar, Luis and Gomez-Herrera, Estrella and Mueller-Langer, Frank, The Digital Transformation of News Media and the Rise of Disinformation and Fake News (April 20, 2018). Digital Economy Working Paper 2018-02, Joint Research Centre Technical Reports. Available at SSRN: https://ssrn.com/abstract=3164170 or http://dx.doi.org/10.2139/ssrn.3164170

Bertin Martens (Contact Author)

Joint Research Centre ( email )

Edificio Expo, C
Inca Garcilaso, s/n
Sevilla, E-41092
Spain

Luis Aguiar

University of Zurich - Department of Business Administration ( email )

Rämistrasse 71
Zurich, CH-8006
Switzerland

Estrella Gomez-Herrera

European Commission Joint Research Center ( email )

1049
Belgium

Frank Mueller-Langer

European Commission, Joint Research Center

Seville
Spain

Max Planck Institute for Innovation and Competition ( email )

Munich
Germany

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