By now it should be clear to everyone that social media, in addition to its many remarkable qualities, also holds dangerous potential for spreading misinformation and causing panic. In the latest such incident, hackers who gained access to the Associated Press Twitter account caused a short (but sharp) sell-off on the stock market with a fake tweet about an explosion at the White House.
The fake AP tweet caused the Dow Jones Industrial Average to drop 145 points between 1:08 pm and 1:10 p.m., according to the Wall Street Journal, while the price of gold and U.S. Treasury bonds increased. The stock losses (and gains for gold and bonds) were quickly erased once the AP and the White House debunked the false report. According to other news reports a group calling itself the Syrian Electronic Army, which supports the regime of Syrian dictator Bashar al-Assad, took credit for the Twitter hack, which also produced swings in commodity prices and currency exchange rates.
This isn’t Syria’s first time around the social media rumor
mill. Last August I wrote about a false Twitter rumor to the effect that al-Assad had been killed or injured, which originated with a Twitter account supposedly belonging to Russian interior
minister Vladimir Kolokoltsev and caused crude oil futures on the New York Mercantile Exchange to rise from $90.82 to $91.99. Also during August, tens of thousands of people from the northeastern
Indian state of Assam fled after rumors of impending communal violence circulated on social media. And during Hurricane Sandy a Twitter user, @ComfortablySmug, triggered widespread
alarm with false reports of severe damage in Manhattan.
Earlier this year a report from the World Economic Forum, titled “Global Risks 2013,” warned that rumors disseminated via social media could “wreak havoc” on the world economy, envisioning scenarios including mass stock sell-offs and disorganized, panicked mass evacuations. Of course, the report noted that social media also holds out the means of correcting misinformation, as for example with erroneous Wikipedia entries. But the problem is that it would only take a relatively short amount of time for the damage to be done: “[I]t is conceivable that a false rumour spreading virally through social networks could have a devastating impact before being effectively corrected.”