The danger of online rumors to companies

Lotte Chilsung Beverage, Korea`s leading soft drink and liquor maker, is suffering from falling sales after a groundless rumor on its soju brand Cheoeumcheoreom spread via social networking sites. The rumor surfaced as a cable channel aired a program this month that alleged that the regenerated alkaline water used in the drink is harmful to health. This helped the share prices of rival soju makers to surge. Lotte immediately placed an ad in major newspapers and issued news releases refuting the allegation, and pledged stern legal action against malicious rumors.

The method of using regenerated alkaline water was approved by government bodies such as the Korean Food and Drug Administration and the National Tax Service after a customer raised the issue upon the release of Cheoeumcheoreom in 2006. The Supreme Court ruled that the customer must pay for damages, with a criminal trial still pending. "We filter raw water collected from Gangwon Province to produce regenerated alkaline water at high cost. It is a key functional water used in mineral drinking water, beverages and alcohol in countries with advanced food systems," Lotte said. The cable channel aired a program making an unsubstantiated claim.

This is not the first time that companies are suffering from rumors spread via social network sites. Last month, a shabu shabu (Japanese meat and vegetable hotpot) restaurant had a rough time due to the false claim that a restaurant employee assaulted a pregnant customer. Early this year, a groundless rumor spread that the franchise Jaws Food is an affiliate of CJ Group, which was under fire as a large company that encroached on the business turf of smaller companies. SPC Group had to confront rumors that its bakery affiliate Paris Baguette was owned by a religious group. When Hite beer acquired liquor maker Jinro, rumors spread that Japanese capital was involved in the acquisition process. Previously limited to malicious attacks against celebrities or for political comments, the abuse of social network sites for spreading lies now afflicts companies.

Companies support the people`s livelihood. Bullying innocent companies is like polluting water in a well shared by neighbors. Social networking sites can be a venue for collective intelligence when used properly, but cause social harm if abused with groundless rumors and malicious comments. Harming companies without proper verification of facts should be sternly prosecuted to protect the very place that people live by and for.