The News Media Association (NMA), which represents national and local media in the UK, claimed that the digital advertising supply chain which favors fake news and helps it to thrive was murky and fraudulent.
In a recommendation to the Commons Culture, Media, and Sport's committee fake news inquiry, the body asked there be instituted an urgent investigation by regulators such as Ofcom into its impact on Google and Facebook.
The report discovered that fake news stories, which are more likely to go viral, are also more profitable than real news regarding clicks and advertising revenues. This prompted the media body to question the sustainability of digital news where fake news flourishes on popular online platforms.
The rise of programmatic advertising, a type of targeted advertising that collects data on individual users from their clicks and follows with tailored adverts, has led to commercials appearing on fake news sites.
This leaves advertisers unaware of how their money is utilized.
The body's recommendations have also suggested that fake news sites deprive legit news publishers of valuable advertising revenue. It added that the fake news 'farms' have an unfair advantage because they do not incur the same costs as the media houses, such as paying journalists and lawyers.
"News media publishers are by far the biggest investors in original news content but the digital supply chain rewards distributors of content, not the originators. The government and regulators cannot ignore the impact of the Google-Facebook duopoly on our media landscape forever," said Ashley Highfield, NMA's chairman.