Does important news always trend? We are learning that this does not happen: social media optimizes for engagement, and the result is that clickbait and dramatic headlines get maximum value. Social media is defining the headlines people see and read, especially at a time when over half of all Indian users online use Facebook, and 60% use Whatsapp.

Forwarding and sharing content on these platforms is extremely easy, and the result is that the news you see is what is amplified by everybody else. Facebook favors some items over others in the newsfeed, with its algorithm deciding what goes on top based on clicks and interactions. Whatsapp has what your friends are sharing.

The result is three major effects:

Missing out on important news: People tend to share news that they can personally relate to. For example, since demonetization Facebook feeds have been filled with news about queues at ATMs and banks, but there was little attention on social media to the news of the sinking rupee.

The first news item is something users are seeing and directly experiencing, while the headline about the falling rupee - and the RBI intervening to halt its tumble - gets little notice beyond market watchers. It's too abstract, and there is no hook. It doesn't directly impact most people's lives today, even though the news is ringing alarm bells about money flows out of the country, and broader pessimism about India's economic health. Policy and economic news in particular gets the short shrift in the 'viral news' environment. 

Overhyped accurate news: A few weeks ago pharma stocks took a significant beating in the stock market, based on news that Indian generics had been named in investigations by the US Justice Department on price-fixing. Stocks like Sun Pharma fell as much 11% during trading, a reaction that was probably unwarranted on close reading of the news and reports: none of the Indian pharma were directly named for collusion, but received a sub poena to testify on pricing along with many others.

The investigation was being pushed by the Democrat senator Bernie Sanders in the midst of a heated Presidential election campaign, a season during which one of the big news headlines was the rising price of an certain essential anti-allergy drug, the EpiPen. Price-fixing is notoriously difficult to prove in the best of circumstances, and in this case pharma companies pointed out that price hikes responded to competitor hikes because patients receiving such medication were price-insensitive, since these drugs are subsidized/insured. The headlines emphasized none of these, and the words investigation, 'Justice Department' and so on were enough to send Indian pharma stocks reeling.   

The worst of all, active misinformation: Times like demonetization and election campaigns - whether in India or the US - are most effective for the spread of viral, fake news. There was for example, the fake news item that Modi was a 'sweeper' during his youth, and more recently rumors shared across Whatsapp that the government was going to bring back old 500 and 1000 notes, or that the 'government' was confiscating gold people took to jewelry shops to sell. Another trend particularly on Whatsapp, has been fake stock tips, driven by unscrupulous entities looking to make a quick buck on a penny stock by convincing other people to buy in.

It's hard to address the first two problems. Tabloid journalism is here to stay for a reason: celebrities, sports events, cats doing somersaults and relatable news will always get the most eyeballs. Media competition means aggressive headlines, and markets will react accordingly.

The third, most venal form of news however, needs serious consideration and action, because it systematically undermines fact in favor of farbicated headlines and propaganda. SEBI recently released a consultation paper suggesting that stock tips and trading discussions be banned on social media entirely, a blunt system that also endangers free speech. Addressing the issue of fake news successfully would require measures taken by the big internet firms - Google and Facebook. Few people check to verify the news they receive, so the only way to limit the sharing of such items is to make it less financially viable - by removing such news from services such as Google Adsense - and deleting/flagging such news items.

This brings to the fore what exactly, counts as 'fact' versus 'fiction'. This is complicated to assess - websites like Snopes have a grading system that is not black and white - including estimates like 'mostly false' and 'mixed'. But this would still help with the Pants On Fire stories - the ones that come with a damaging agenda, are highly polarizing, mislead readers, and in the worst situations, scam them out of their money. 

Photo: The recently concluded election season in the US saw more engagement for fake news than real news on Facebook. Buzzfeed