Thursday, May 17, 2007

Should Engadget be fined for posting false information about an Apple iPhone delay?

Yesterday Engadget (one of my favorite websites) posted a story in haste without verifying it just so as to get a scoop about Apple delaying the iPhone and Leopard.

The best line, if I may steal it from the 1st Spiderman movie, to sum this whole thing up:

"With great power comes great responsibility"

Here is the full post:

This one doesn't bode well for Mac fans and the iPhone-hopeful: we have it on authority that as of today, the iPhone launch is being pushed back from June to... October (!), and Leopard is again seeing a delay, this time being pushed all the way back to January. Of 2008. The latest WWDC Leopard beta will still be handed out, but it looks like Apple-quality takes time, and we're sure Jobs would remind everyone that it's not always about "writing a check", but just how much time are these two products really going to take?

Update:

Here's the story. A trustworthy source supplied us with an actual internal Apple email that went out to thousands of Apple employees earlier today (published after the break). The fact that this was an email sent within Apple's internal email system to its employees is not in question. Let us reiterate: this was an ACTUAL email distributed within Apple's internal email system to Apple employees.

As it turns out, the internal memo Apple employees received was actually retracted by Apple shortly after it was sent out. (Also published after the break.) We received confirmation from Apple PR that this initial email sent out to Apple employees was incorrect, and they let us know that the iPhone and Leopard are both still on track, and should meet their expected launch timeframes.

Presumably, Apple is now on the hunt for whomever was able to spoof its internal email system.


I understand the desire blogs have to get scoops and the rush to press without verification. It's always a temptation, but incidents like this really weaken blog credibility. Engadget has one of the highest hit totals on the internet though - they don't NEED to do this.

Kevin Kelleher at Gigaom made an interesting observation:

In the volatile 23 minutes of turmoil between the minute the disinformation hit the stock market at 8:55 PST and Apple’s announcement that the initial email “is fake and did not come from Apple,” nearly 15 million shares changed hands. That’s 60% of Apple’s normal volume in well under a half hour. That’s also an awful lot money lost for some investors - and gained for others - all of it because of a lie.


I think it's worth noting also that many people may not have seen the correction and it could take days to set people's psyche straight. With the iPhone being one of the most hyped product launches in history (no doubt THE biggest) such sloppy rushed reporting could do immense damage to Apple.

To me ... this is a very serious problem that Apple has on its hands. The iPhone launch must be so perfect that even the tiniest error at launch could cost them billions due to over reactive bloggers, financial analysts, and Apple fanatics - even Apple haters - wishing to spread bad information quickly.

While I don't think we need the "Code of Manners" as proposed by The New York Times - I do think there should be some sort of voluntary commital to the SPJ Code Of Ethics - and in turn some sort of seal that blogs could place on their websites.

Some blogs, such as this one, need to be able to distinguish themselves from other blogs for legitimacy sake anyway. Adding a type of blogger commital to a code of ethics and an indication on the site of a dedication to an ethical code would legitimize certain blogs a lot more.

I also propose that there be a rating system for each article where peers who are part of this "proposed seal program" could either provide positive ratings or hand demerits out to websites for their reporting.

I know that I would give many many kudos to Arnold Kim at Macrumors.com (even though I dislike rumor sites) - I think Arn (his nickname) deserves to be recognized for his immense contribution to the Apple news world and they way in which he presents his information.

Macrumors.com reported this as such:

iPhone and Leopard Delayed? [Update: False]
Posted by arn

I'm cautious to post this, as there has been no other verification, but Engadget claims that both the iPhone and Leopard have been delayed.

According to the gadget site:

This one doesn't bode well for Mac fans and the iPhone-hopeful: we have it on authority that as of today, the iPhone launch is being pushed back from June to... October (!), and Leopard is again seeing a delay, this time being pushed all the way back to January. Of 2008.

Engadget only states "we have it on authority" and no other source is given.

In the past, Engadget has been very liberal about linking almost any Apple rumor found on the internet, but they rarely post Apple rumors based on their own sources. That being said, the last time they did (October 2006), they were wrong. However, due to Engadget's popularity and confidence in this report, this has been posted on Page 1 rather than Page 2.

Apple has repeatedly stated that the iPhone is on track for a late June release.

Update: Engadget has retracted the story, saying they received "further correspondence stating that this isn't accurate" and that Apple PR let them know that the iPhone and Leopard are still on track.


I chose not to report on "An iPhone delay" yesterday because I knew without any doubt that it wasn't true - as I am involved closer than most with the project. I also have a local source that can verify any information about the iPhone.

Everyone who writes and reports makes errors ... we are only human. But ... this wasn't a factual error - this was "a non factual unverified rush to judgement".

Whereas I'm positive Engadget would receive many many positive ratings - they do deserve something other than a smirk for their sloppy reporting without double verification of the facts.

Just thinking out loud here but ... Maybe if we had some internal voluntary blogger fining/policing and fines would be contributed to a legal fund to defend bloggers?

I sent this email to Engadget this morning:

To Whom It May Concern,

I would like a better apology than a strike through to Apple Shareholders and to fellow bloggers concerning yesterday's irresponsible posting of an Apple iPhone Delay.

I understand the desire blogs have to get scoops and the rush to press without verification. It's always a temptation, but incidents like this really weaken blog credibility. Engadget has one of the highest hit totals on the internet though - they don't NEED to do this.

Kevin Kelleher at Gigaom made an interesting observation:

In the volatile 23 minutes of turmoil between the minute the disinformation hit the stock market at 8:55 PST and Apple’s announcement that the initial email “is fake and did not come from Apple,” nearly 15 million shares changed hands. That’s 60% of Apple’s normal volume in well under a half hour. That’s also an awful lot money lost for some investors - and gained for others - all of it because of a lie.

I chose not to report on "An iPhone delay" yesterday because I knew without any doubt that it wasn't true - as I am involved closer than most with the project. I also have a local source that can verify any information about the iPhone.

Everyone who writes and reports makes errors ... we are only human. But ... this wasn't a factual error - this was "a non factual unverified rush to judgement".

Engadget deserves something other than a smirk for their sloppy reporting without double verification of the facts ... especially without apology.

You are one of my favorites sites on the internet - please suck this up and apologize to bloggers, readers, and Apple shareholders.

Philip Smith
www.fixyourthinking.com


* See this for the personal response from the Senior Editor at Engadget and a statement posted to the Engadget website.

.

19 comments:

Anonymous said...

Should Engadget be fined? Absolutely, they knew better. They hurt not only themselves, but all other bloggers, not to mention innocent investors.

If a doctor does his job with out due care or diligence he is sued for malpractice. If an airline pilot flies knowing he is too tired, etc. and there is a major problem with the flight, he is held responsible. If I drive and show little respect for the speed posted and cause an accident, I'm held responsible, so why not Engadget?

What they did, in their sloppy reporting, wasn't a little petty thing. It cost a lot of real and innocent investors to lose a lot of real dollars.

If I'm prosecuted for abetting someone in shop lifting of a $50 item in Costco, I will have to pay the price. Engadget abetted in someone, somewhere, in possibly stealing not millions, but BILLIONS of other people's money. They should be held accountable!

Anonymous said...

Engadget was tricked by a spoofed email, it's that simple.

They can't be held responsible no matter how hard someone tries. The daily fluctuation of a stock price is mainly based on "rumor" in one form or another, so where do you draw the line?

You can't... investors should have confirmed this "rumor" through official apple press releases, they failed to do that, and lost. So let it be a lesson to them.

-

Ben said...

Actually, Engadget won't be fined. There is a lot of disinformation out here in the net, plus sloppy reporting isn't limited to the web, but is present in print as well. All the publisher has to do is print a retraction. Apple could sue them, but that would be pointless.

This may be the new way of organized crime making money. Posting erronious information and then shorting the stock.

fixyourthinking said...

They shouldn't have reported it THAT's what they could have done! If they would have waited 2 hours JUST 2 hours and not tried to rush to get this out especially with the wording they used ... everything would have corrected and they could have reported it as "We received a false alarm, whew"

This was irresponsible no matter how you put it.

fixyourthinking said...

But there wasn't a retraction and this wasn't just misinformation.

You're right about other sources doing it ... but when a blogger (A VERY VERY BIG blogger) does it .... it makes us all look bad. When a New York Times writer does it, no one but the paper and the writer look bad.

Anonymous said...

Of course they shouldn't be fined! Not even censured! If investors are stupid enough to rely on one non-official source for investing tips they deserve to lose their entire portfolio. I encourage more websites to publish disinformation about companies. Let investors hearty up a bit. Freedom of speech shouldn't be limited to conversations that don't touch on stock investments and the prophet Mohamed.

fixyourthinking said...

This was NOT PROTECTED free speech ...

This was equivalent to shouting FIRE in the a theater - the example given as unprotected by the Bill Of Rights!

Anonymous said...

The Bill of Rights offers no examples of protected or unprotected free speech.

fixyourthinking said...

Each article has example and case law to back it up. The most accepted and laymen example of a time when one does not have free speech is shouting "fire" in a movie theater if there is no fire.

Anonymous said...

No “example” exists for any part of the Constitution (n.b., the Bill of Rights consists of amendments; the “articles” are found within the original confines of the Constitution). Case law does not “back up” the Constitution, it applies the law of the Constitution to specific cases, which either may or must be relied upon in later cases as precedent, depending on the currently deciding court.

I suppose will take the last word in this exchange; that is your prerogative, as this is your weblog.

My reason for commenting follows. You named your blog “Fix Your Thinking”; consider the irony as you report on sloppy reporting in your own sloppy way.

fixyourthinking said...

So basically what you're admitting is that you are splitting hairs.

I think it's obvious what I mean ... there is no sloppy reporting here ... at least not in this case.

blogdog said...

I've watched this trolling unfold. I'll save the day for Philip I suppose. Please see italicized bold letters.

The Conventions of a number of the States having, at the time of adopting the Constitution, expressed a desire, in order to prevent misconstruction or abuse of its powers, that further declaratory and restrictive clauses should be added, and as extending the ground of public confidence in the Government will best insure the beneficent ends of its institution;

Resolved, by the Senate and House of Representatives of the United States of America, in Congress assembled, two-thirds of both Houses concurring, that the following articles be proposed to the Legislatures of the several States, as amendments to the Constitution of the United States; all or any of which articles, when ratified by three-fourths of the said Legislatures, to be valid to all intents and purposes as part of the said Constitution, namely:

Amendment I


Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Amendment II


A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.

Amendment III


No soldier shall, in time of peace be quartered in any house, without the consent of the owner, nor in time of war, but in a manner to be prescribed by law.

Amendment IV


The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Amendment V


No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Amendment VI


In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

Amendment VII


In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.

Amendment VIII


Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.

Amendment IX


The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment X


The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

Anonymous said...

I’ll concede that point, blogdog; certainly the amendments are articles “in addition to and amending” the Constitution. However, your point only contradicts a tangential point of mine made inside parenthesis, not my primary point.

To be clear: I was not trolling. I was attempting to point out the possibility that the blog author’s declaration that this “was not protected free speech” was a bit of a rash conclusion. Analysis of whether speech is protected is complex, and, ultimately, the answer lies in the hands of the courts. To claim the Bill of Rights gives examples is incorrect (from the author: “the example given as unprotected by the Bill Of Rights”) and such a statement wrongly gives support to a questionable conclusion.

fixyourthinking said...

Is the first ammendment often mentioned with "shouting fire in a theater" or not?

Has that not been the classic example for years?

Is Engadget's blogging "Apple's biggest product launch ever is going to be late" NOT the same thing?

I, a little insignificant blog was able to verify that wasn't true ... imagine the resources and contacts Engadget has that I do not.

It's clear ... I provided proof. This REALLY did harm Apple shareholders. This was false - there is no defense to a defamation claim without the truth.

YouTube Addict said...

Bring on the SEC!!!

Anonymous said...

Posted on bloggingstocks.com by a commenter named mongul:

"If Engadget hadn't reported the rumor, one of its many competitors surely would have." And this competitor would have looked foolish. Engadget couldn't allow that to happen. :-) Red flags or not, blogs will publish anything. "If we don't, someone else will" is a weak excuse. (Sorry for the nasty comment, but if I don't make fun of you, someone else will.)

John said...

"They can't be held responsible no matter how hard someone tries. The daily fluctuation of a stock price is mainly based on "rumor" in one form or another, so where do you draw the line?"

Whether they can or can't be held responsible, they SHOULD be. The fact is, they were responsible for what happened with the stock no matter how you look at it.

The person who wrote the spoofed email initiated the whole thing but if Engadget hadn't reported it, the stock wouldn't have done what it did.

The argument that "if Engadget hadn't reported it, someone else would" is irrelevant. If that had happened, the "someone else" would have been responsible (assuming they had the same reach Engadget does).

If someone leaves their front door wide open when they go on holidays and I was to go in and steal all their belongings, the argument that "if I hadn't done it, someone else would have" isn't going to absolve me of responsibility.

Anonymous said...

When considering whether Engadget should be "fined" (or otherwise punished), I'm curious as to why they didn't post this part of the bogus email (emphasis added):

"Copyright © Apple Inc. All rights reserved. As a condition of receiving this publication, you agree that you will not unlawfully duplicate, download to a database, transmit electronically, or disseminate by any means whatsoever any portion of this publication, nor will you use any information in this publication in violation of the Copyright Act. If you violate these terms, you will be subject to all penalties provided under United States copyright laws, including penalties of up to $50,000 per incident and all other remedies available to Apple Inc. in equity or at law."

Perhaps they didn't want to identify their obvious culpability.

fixyourthinking said...

Very good find