There was one problem: The tweet was fake, posted from a parody account. Although Eli Lilly’s official account promptly clarified the situation, the damage had already been done. The company’s stock value dropped by 4%, rattling investors who feared a significant hit to profit and reigniting heated public debates about the cost of insulin.

That wasn’t the first time the industry had been rocked by a fake news scandal. Several months earlier, a manipulated video appeared online of Pfizer’s CEO, Albert Bourla, in which he appeared to say, “By 2023, we will reduce the number of people in the world by 50%.” Outraged viewers demanded his arrest, labeling pharmaceutical companies as “evil.” Of course, the video had been edited. Bourla had actually stated that “we will reduce the number of people in the world who cannot afford our medicines by 50%.”

Fake news isn’t a problem just for the pharma industry. It has targeted the financial sector (Metro Bank), consumer goods (Coca-Cola), restaurants (McDonald’s), airlines (Delta), entertainment (Disney), the fashion industry (Victoria’s Secret), the automotive industry (Tesla), and others. Fake news has also proven disruptive in politics, eroding trust in democratic institutions, deepening polarization, influencing voting perceptions, and swaying results in closely contested elections.

Unfortunately, fake news is a stubborn problem that is unlikely to go away. While many U.S. adults feel confident in their ability to detect fake news, 38% of U.S. social media users have accidentally shared a fake news story, according to the Trusted Web Foundation. Complicating matters, fake news spreads significantly faster than real news—it is up to 70% more likely to be shared, according to a study of news stories on Twitter by MIT researchers. And with each share, it gains momentum: The more it gets shared, the more it looks true, and the more people share it. Fake news is likely to be an even bigger problem in the coming years as trust in legacy media continues to erode, advances in AI and video-editing technologies make fabricated content nearly indistinguishable from reality, and social media companies abdicate their content-moderation responsibilities, as Meta did in early 2025 when it announced that Facebook would stop fact-checking content on its platforms.

Fake news is distinct from misinformation or false rumors, which can be defined as false content shared regardless of intent. In contrast, fake news is a specific type of disinformation: It is deliberately fabricated as a “news” story with an intent to deceive, transmitted by social media, and characterized by virality.

The traditional corporate playbook for responding to misinformation or false rumors assumes that a company is engaging with actors who want to set the record straight or are open to fact-based persuasion. It calls for companies to ignore the information, scramble to have it removed, or provide facts and accurate information to debunk false claims. This fact-checking approach typically involves issuing statements through its own media channels, such as corporate Facebook pages or X accounts, as Eli Lilly did. When it comes to fake news, all those approaches are insufficient. Through our own research and decades of experience in studying and advising on reputation management, we’ve found that conventional methods fail to address the full scope of the challenge, for several reasons.

First, ignoring fake news is rarely effective. Managers often assume that a solid reputation serves as a natural defense, believing that fake news will not be taken seriously enough to affect the company. However, in an era where disinformation can spread with unprecedented speed and reach, silence can be risky.

Second, asking news outlets and social media platforms to swiftly remove or correct harmful content is an important first step, but it is insufficient to staunch the flow. Fake news often resurfaces through screenshots, reposts, or alternative formats, making it nearly impossible to contain its spread entirely.

Third and more frustrating still, correcting the record with facts does little to change the narrative. For instance, when Wayfair faced baseless accusations of child trafficking in 2020, the company’s clarifications failed to prevent the rumors from going viral and ultimately reaching some 4.5 million people. And when the Arab airline Saudia faced false accusations of segregating men and women on its flights, company spokespeople denied the claims in newspaper interviews. Despite their efforts, the fake news took on a life of its own, sparking ongoing online debates about Islamophobia, sexual harassment on airplanes, and cultural misunderstandings—conversations that continued to propagate the fake news story.