Global regulators scramble to address threat of fake news

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“You are well aware of your users’ — and authorities’— reports on fake content and glorification of violence. Up to you to demonstrate that you walk the talk.”

That was the message from the EU to Elon Musk, owner of X (formerly Twitter) in a row over the platform’s spreading of “illegal content and disinformation” in the wake of Hamas’s attacks on Israel. It follows another flashpoint earlier this week around a manipulated clip of US president Joe Biden on Facebook, giving new urgency to the debate around the regulation of social media in a new age of AI-enabled fakery.

The posts that concerned the European Commission involved graphic imagery taken out of context, doctored photos and even footage of violent fighting taken from a video game. The complaints follow a dramatic overhaul of X under the ownership of Musk, a self-declared “free speech absolutist”, who has cut trust and safety staff and loosened moderation policies. 

Misinformation and propaganda tend to swell during periods of conflict, as highlighted by the surge at the start of Russia’s full-scale invasion of Ukraine across platforms including X, TikTok and Meta. Elections too are ripe for disinformation campaigns: Meta’s Oversight Board is currently examining company guidelines following publication of the Biden video and the broader issue of “how manipulated media might impact elections in every corner of the world”.

The US general election could be the biggest test yet of how social media platforms handle “deepfake” video and audio, writes US national editor Edward Luce, who doubts whether we are ready “for the industrial scale flows of disinformation that are coming our way”. The election earlier this year in Venezuela could be a warning sign.

Generative AI technologies — software that can create images, videos and text based on user prompts — have made such misinformation easier to create. But as groups such as Microsoft-backed OpenAI and Meta race to commercialise AI, the “guardrails” that prevent systems going awry are struggling to evolve in tandem, writes FT artificial intelligence editor Madhumita Murgia.

Regulators meanwhile are playing catch-up. The EU has been at the forefront of regulation (read more here on its approach from European comment editor Tony Barber) but the US and China are debating their own controls. The UK, which is hosting a global summit on AI regulation next month, is pushing companies, including OpenAI and Google’s DeepMind, for access to the technology that drives their models.

EU adviser Marietje Schaake, writing in the FT last week, warned of the dangers ahead in 2024, which has been labelled the “Year of Democracy”, with key elections in the US, EU, India and elsewhere in jurisdictions where democracy is under threat or in decline. She called for independent audits for bias and support for research into disinformation efforts, with access to information currently hidden, such as content moderation decisions.

“When it comes to AI and elections, I believe we cannot be careful enough,” she writes. “Democracies are precious experiments, with a growing set of enemies. Let us hope that 2024 will indeed be the ‘Year of Democracy’ — and not the year that marks its decisive decline.”

Need to know: UK and Europe economy

Labour opposition leader Sir Keir Starmer set out his stall to become the next UK prime minister. The FT editorial board said: “Business and investors will not like all of the answers [Labour] is offering; some still need a lot of elaboration. But it is focusing on the right questions.”

The IMF said the UK would need a further interest rate rise to tame “persistent” inflation, which it predicted would hit 7.7 per cent this year before falling to 3.7 per cent in 2024. On the plus side, UK grocery inflation fell for the seventh month in a row, according to new industry data, down from an annual rate of 12.2 per cent to 11 per cent.

The Bank of England is pushing to double the amount of easily sellable assets that money market funds have to hold, the latest move by financial watchdogs across the world to reduce “shadow banking” risks.

Poland’s general election on Sunday pits Jarosław Kaczyński, the country’s de facto leader, against his arch-rival Donald Tusk. Their deeply personal feud has shaped the country’s politics for two decades.

Need to know: Global economy

The IMF said governments needed to cut deficits or risk hindering central bank efforts to tame inflation. It also warned against any policy easing, especially from the US Federal Reserve, and risks from bond market turmoil. A Big Read examines American plans to revitalise the IMF as well as the World Bank.

Chief economics commentator Martin Wolf highlights how the pandemic, post-Covid supply disruption, war in Ukraine and the subsequent surges in commodity prices have altered the global landscape. Poorer countries have suffered the most and decades-long trends in poverty reduction have been reversed.

“Nervous, but not terrified”: Oil traders played down the effect of the conflict in the Middle East and comparisons with the 1970s price shock. Robert Armstrong in his Unhedged newsletter (for Premium subscribers) argues that markets are generally bad at assessing geopolitical risk.

Argentina’s peso tumbled against the dollar as voters and markets braced for a possible victory by Javier Milei, a radical rightwing economist who wants to dollarise the economy, in elections on October 22.

Need to know: business

The end of the “Roaring Twenties” already? LVMH, the world’s biggest luxury group reported softer demand for cognac and posh handbags, sending its shares downwards.

Country Garden, China’s largest private developer, warned of a potential default on its international debts which would be a significant blow to the country’s embattled property sector with shockwaves rippling through Asia. China’s Golden Week holiday, although providing some relief to the tourism sector, looks as though it failed to bring an uptick in new home buying.

Taiwanese semiconductor suppliers are targeting investment in Europe as the construction of the first advanced chip factories on the continent in decades reshapes supply chains.

France’s TotalEnergies was accused of involuntary manslaughter by survivors of a 2021 terrorist attack in Mozambique that killed dozens of people and forced the company to halt Africa’s biggest natural gas development.

The World of Work

Demand for office space continues to slump, with vacancies at 20-year highs in the US and London despite companies’ attempts to lure people back. Large companies in the meantime are holding off committing to property deals while working patterns remain in flux.

As corporate purse strings tighten, employer funding for Executive MBAs is falling, with some setting up their own programmes instead. Read more in our special report.

How can we learn from our workplace failures? Listen to the new edition of the Working It podcast.

Some good news

The winners of the Wildlife Photographer of the Year, developed and produced by the Natural History Museum in London, have been announced. This shot of a hippopotamus and her offspring resting in a shallow clear water lake took the Underwater award.