Laboratoires Berden had quite a run. Founded in 1996 by Eric Dumonpierre, who also served as CEO, Berden successfully commercialised Mutorex, a drug to treat obesity. Dumonpierre quickly became a star chief executive, winning several awards for corporate social responsibility. He invested in an all-hybrid vehicle fleet well before it was fashionable. He planted trees in and around Paris to stop deforestation. His employees loved him; they were given "solidarity leave" — full pay while on humanitarian missions, and he instituted a 32-hour workweek. Dumonpierre was celebrated at industry conferences and political forums, and was cited in the media.
But in the mid-2000s his impeccable reputation took some hits. There was disquiet over Berden's intent to offshore some operations, potentially leading to layoffs in France. Then a philanthropic venture of Dumonpierre's was exposed as a front for an organisation that employed child labour in Asian factories. Rumours of serious side effects to Mutorex surfaced, and an executive died by suicide under circumstances that are still mysterious.
Still, by 2009 Berden and Dumonpierre had weathered the storms — and profits skyrocketed.
What's most incredible about Berden and Dumonpierre is not their success or how their reputations recovered from scandal. It's that neither the company nor its CEO exists. Every iota of information was fabricated — by college students — starting in 2005 and kept alive for a decade. This is the story of how, in our classroom, we at HEC Paris created false news before anyone understood the phenomenon — and what we've learned about the techniques that make false news spread and stick.
The reputation game
The Laboratoires Berden story came out of the course we teach, at HEC Paris, about corporate reputation and crisis management in the age of the internet. The assignment was simple: Create a company and a CEO, and raise their profiles online so that they rise to the top of search engine rankings for general terms related to the firm. In the first year, the students created Berden, Dumonpierre and peripheral players — including an investment partner called John Fund Equity and its CEO Elvis Brownie, and nonprofits that championed Berden's operations in developing countries. Students were not allowed to communicate directly in any way with legitimate media outlets. They had to grow the reputations organically by building out an internet ecosystem of websites and social media accounts that distributed news releases and spread other information about the company.
The devious twist: While one group of students was building up the company and its CEO with false stories, another set was assigned to tear them down with reports of scandal and misdeeds, using the same tools and the same rules.
Then, every year, a fresh crop of students would carry on the fight. Each class would create new highs (Dumonpierre won France's CEO of the Year) and new lows (a polluted river tarnished Berden's reputation).
We constructed a false-news tug of war to learn which tactics would find their way to the top of search rankings and move reputations one way or the other. The two teams of students competed for visibility on the internet because, in the corporate world, visibility is what sustains sales momentum. The information we find factors into decisions we make. A person's or a firm's reputation may be only as good as what someone sees listed on the first search-results page. If false news sticks, it carries real consequences for businesses.
Recent research indicates that false news is easier to spread than real news, and our 10-year experience of managing the reputations of Laboratoires Berden and Eric Dumonpierre bears this out. With limited resources, even in the first year, and although the accounts and websites that students created were quite rudimentary, the false news proliferated rapidly. Developments about Berden and Dumonpierre also spread on social media threads and on discussion boards. Job candidates sent their curricula vitae to Laboratoires Berden, and the firm even received a complaint from a real pharmaceutical company about the unauthorised commercialisation of Mutorex.
Even now, a few years after the university seminar ended in 2014, web search still turns up more than 20,000 references to Berden, Dumonpierre and the other fictitious organizations.
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Why did it work?
Research on the spread of false news shows that the students were using communication techniques that, decades earlier, academics had discovered as drivers of this phenomenon. Readers are more likely to distribute vivid stories that inspire emotion than stories that are flatly recounted. The students used this understanding to encourage the spread of their news.
The students also boosted believability through repetition, reposting and relinking stories across the ecosystem of sites and accounts they had created, until eventually the algorithms lifted those stories to the top of search results.
Finally, the students enhanced the stickiness of the false news by recycling old stories when they generated new ones. Students in each seminar didn't just develop new wins and scandals — they also referenced and built on the previous fabrications, creating a mesh of reports that contributed to a long narrative that was picked up and reposted by casual web users, journalists, activists and bloggers.
False news is in the spotlight because of its role in today's politics, but perhaps more insidious is its use in business and economics. Fact-checking sites like Snopes and Emergent document a steady stream of false news that hurts corporate reputations.
Investors and traders are contending with false news from sites that fabricate information about firms to goose stock prices for quick sell-offs, a modern twist on the classic "pump and dump" scheme that relies on the sharply rising use of algorithms to make trades.
Our success in saturating a web ecosystem with convergent false news, comments and analyses suggests the dangerous potential of this type of long-term influence strategy.
It takes very little imagination to envision that well-funded, professional "fake journalists" would be able to weave a false news narrative much bigger and more sophisticated than our reputation game. The scale of deception, amplified by the search algorithms of legitimate actors, means that corporate reputations are more vulnerable than ever.
Adopting the technical and social skills and the heightened focus needed to manage this phenomenon should be a top priority for any company, lest it permit the false news to go viral, stick and begin to erode the bottom line. Our personal and corporate reputations are so strongly linked to value creation that this may become one of the most important jobs of any firm.
Written by: Ludovic François and Dominique Rouziès
© 2019 Harvard Business School Publishing Corp. Distributed by The New York Times Licensing Group