Article image

The Price of Disinformation

Monday, 10 November 2025 22:50

Summary

The American media landscape has been fundamentally reshaped by a second colossal financial penalty, as Fox News agreed to pay $1.2 billion to Smartmatic to settle the voting technology company’s defamation lawsuit over the network’s coverage of the 2020 US presidential election1,2. The settlement, which avoids a high-stakes trial in New York, follows the network’s earlier $787.5 million payment to Dominion Voting Systems in 20234,8. Smartmatic’s initial claim sought $2.7 billion in damages, alleging that Fox News knowingly and intentionally spread false conspiracy theories that decimated the company’s business prospects3,7. The core of the case rested on the legal standard of 'actual malice,' which Smartmatic argued was proven by internal communications showing Fox executives and hosts privately dismissed the election fraud claims as 'crazy' and 'nuts' even as they amplified them on air3,6. This unprecedented financial reckoning underscores the profound legal and economic consequences for media organisations that prioritise audience retention over journalistic truth4,8.

The Second Colossus of Accountability

The announcement of a $1.2 billion settlement between Fox News and the voting technology firm Smartmatic marks the second time in two years that the media giant has paid a nine-figure sum to resolve a defamation lawsuit stemming from its coverage of the 2020 US presidential election1,4. The agreement, which was reached just weeks before the case was scheduled to proceed to trial in New York, is a profound financial and legal blow to the network1,2. Smartmatic, a multinational company that builds and implements electronic voting systems, had originally filed a lawsuit seeking $2.7 billion in damages3,7. The company alleged that Fox News and its hosts engaged in a concerted disinformation campaign that falsely implicated Smartmatic in a conspiracy to rig the election against former President Donald Trump3,5. This latest settlement surpasses the $787.5 million that Fox News paid to Dominion Voting Systems in April 2023, which was, at the time, the largest publicly announced defamation settlement in American media history4,8. The combined cost of these two settlements, exceeding $1.9 billion, represents an extraordinary financial reckoning for the network’s post-election coverage4,8. The legal battle centred on a series of broadcasts in late 2020 that amplified baseless claims of widespread voter fraud5,6. These claims, often promoted by guests such as former Trump lawyer Rudy Giuliani and attorney Sidney Powell, falsely asserted that Smartmatic’s software was used to switch votes from Mr Trump to Joe Biden5,6. The conspiracy theories included outlandish assertions that the company was founded by the late Venezuelan leader Hugo Chávez and was somehow entangled with its competitor, Dominion Voting Systems5,6. The reality of Smartmatic’s involvement in the 2020 election was drastically different from the narrative presented on air3,9. The company’s technology was used only in a single jurisdiction: Los Angeles County, California3,9. Furthermore, the system deployed in Los Angeles County did not count, tabulate, or store votes, a fact that was known to Fox News at the time of the broadcasts3,6. Smartmatic’s corporate parent is based in London, and the company has consistently denied any ties to the Venezuelan government or any foreign official3,5.

The Burden of Actual Malice

The legal foundation of Smartmatic’s case, like that of Dominion’s before it, rested on the demanding US legal standard of 'actual malice'6,10. For a public figure or a company involved in a matter of public concern to win a defamation case against a media organisation, they must prove that the statements were published with knowledge that they were false or with reckless disregard for the truth10. The discovery phase of the litigation yielded a trove of internal communications that Smartmatic’s lawyers argued provided unprecedented evidence of this 'actual malice'6,11. Text messages and emails revealed that numerous Fox News executives, producers, and star hosts privately expressed profound disbelief in the very conspiracy theories they were allowing to be broadcast to millions of viewers6,11. Internal messages showed that network personnel described the claims made by guests like Mr Giuliani and Ms Powell as 'crazy,' 'nuts,' 'bonkers,' and 'comic book stuff'6,11. Rupert Murdoch, the chairman of Fox Corporation, himself acknowledged in a deposition that some of the network’s hosts had endorsed the false election claims6,11. Smartmatic’s legal filings contended that the network’s decision to amplify these claims, despite internal knowledge of their falsity, was a deliberate strategy to appease its conservative audience and prevent a further decline in ratings3,6. The network had faced a backlash from viewers who were angered when Fox News’s Decision Desk was the first to call the state of Arizona for Joe Biden on election night6. This audience retention strategy, the plaintiffs argued, demonstrated a reckless disregard for the truth and a knowing choice to spread falsehoods for commercial gain3,6. Fox News, in its defence, maintained that it was merely reporting on newsworthy allegations made by the sitting President and his legal team, arguing that its coverage was protected by the First Amendment6,9. The network also attempted to argue that Smartmatic’s business was already in decline and that its damages claim of $2.7 billion was wildly inflated, calling the lawsuit a 'litigation lottery ticket'6,9. However, the New York appeals court had previously ruled that Fox Corporation must face trial, determining that Smartmatic had convincingly argued that the corporation was directly responsible for broadcasting the false claims12.

The Precedent of Dominion and the Ripple Effect

The settlement with Smartmatic is inextricably linked to the earlier, landmark case involving Dominion Voting Systems4,8. Dominion’s lawsuit, which was settled for $787.5 million on the eve of trial in April 2023, established a clear financial precedent for the consequences of election disinformation4,8. The evidence uncovered in the Dominion case, including the internal communications of top Fox figures, provided a roadmap for Smartmatic’s legal team10,13. The Dominion settlement also had immediate, high-profile consequences, including the departure of one of the network’s most-watched anchors, Tucker Carlson, shortly after the agreement was reached13. The Smartmatic case was widely seen as the more challenging legal hurdle for Fox News, given the company’s initial demand was significantly higher than Dominion’s $1.6 billion claim7,8. Furthermore, Smartmatic had already secured settlements against other conservative media outlets that had amplified the same false claims2,14. In 2024, Smartmatic settled its defamation lawsuit against One America News Network (OAN) for an undisclosed sum14. Later that year, Newsmax agreed to pay Smartmatic $40 million as part of a confidential settlement, the details of which were later disclosed in a financial filing2,14. These earlier victories demonstrated a pattern of success for Smartmatic’s legal strategy and increased the pressure on Fox News to avoid a public trial2,14. The cumulative effect of these legal actions has been to impose a significant financial cost on the media organisations that promoted the false narrative of a stolen election2,4. The settlements have also forced public acknowledgements from the media outlets regarding the falsity of the claims3,14. For instance, Newsmax confirmed in a statement that Smartmatic is a US company, not owned by the Venezuelan government, and that its technology was only used in Los Angeles County in 20203. The legal battles have also extended to the individuals who promoted the claims13. Mr Giuliani and Ms Powell, who were central figures in the on-air dissemination of the conspiracy theories, have faced their own legal and professional consequences, including disbarment and criminal charges in various jurisdictions13.

The Future of Media Liability

The $1.2 billion settlement with Smartmatic solidifies a new era of media liability in the United States, particularly concerning the dissemination of political disinformation1,4. The sheer scale of the financial penalties suggests that the traditional shield of the First Amendment, while robust, is not absolute when a plaintiff can demonstrate a clear case of 'actual malice'10. The evidence of internal disbelief at the highest levels of the network proved to be the most potent weapon for the plaintiffs, transforming the case from a difficult legal challenge into an existential threat for the media company6,11. The decision to settle, rather than risk a jury trial, indicates a corporate calculation that the potential for a far larger damages award, coupled with the public spectacle of senior executives and hosts testifying under oath, was too great a risk8,10. A public trial would have inevitably exposed more damaging internal communications, further eroding the network’s credibility and potentially inviting more lawsuits8. The financial impact of the settlements is substantial, but the reputational damage to the network’s journalistic integrity is arguably more profound4,10. The cases have provided a rare, unvarnished look into the commercial pressures and editorial decisions that drove the network’s coverage in the aftermath of the 2020 election6,11. The settlements serve as a powerful deterrent, signalling to all media organisations that knowingly broadcasting false information for the sake of ratings or political alignment carries a catastrophic financial risk4,10.

Conclusion

The $1.2 billion payment to Smartmatic, following the earlier settlement with Dominion, closes a painful and costly chapter for Fox News, but the broader implications for the media industry and American democracy remain open1,4. The combined financial penalty of nearly two billion dollars has established a clear, albeit expensive, boundary for acceptable journalistic conduct in the highly polarised political environment4,8. The legal victories for the voting technology companies have demonstrated that defamation law can be an effective tool for accountability against the spread of election-related falsehoods2,10. However, the settlements do not fully resolve the underlying issue of political disinformation, which continues to proliferate across various platforms10. The core challenge remains how to balance the constitutional protection of free speech with the imperative to maintain a fact-based public discourse, especially when the pursuit of profit incentivises the amplification of known falsehoods6,10. The financial consequences for Fox News are a stark reminder that, in the eyes of the law, truth ultimately matters, and lies, when knowingly broadcast, carry a monumental price4,10.

References

  1. Fox News settles Smartmatic defamation lawsuit for $1.2 billion

    This is the primary source for the central, established fact of the article: the $1.2 billion settlement amount and the context of the lawsuit.

  2. Newsmax settled defamation suit over false US election claims for $40m

    Used to cite the $40 million settlement between Smartmatic and Newsmax, providing context for the ripple effect of the litigation.

  3. Lawsuit Updates - Smartmatic.com

    Used to verify Smartmatic's initial $2.7 billion claim, its limited role in the 2020 election (Los Angeles County only), and the nature of the false claims made against it.

  4. Fox News to Pay $787 Million to Settle Election Suit, Dominion Says

    Used to cite the $787.5 million settlement with Dominion Voting Systems and to establish the context of the two major financial penalties.

  5. Smartmatic - Wikipedia

    Used to provide background on Smartmatic's headquarters (London), the nature of the conspiracy theories (Hugo Chávez, Dominion entanglement), and the company's denial of ties to the Venezuelan government.

  6. Smartmatic Court Filing Describes Fox's Actions as a “Campaign of Knowing Lies”

    Used extensively to detail the internal Fox communications (calling claims 'crazy,' 'nuts,' 'bonkers'), the 'actual malice' argument, the number of broadcasts (66), and the motive of retaining angry viewers after the Arizona call.

  7. Fox reaches $787m defamation deal with vote firm

    Used to cite Smartmatic's initial $2.7 billion damages claim and the fact that the Dominion settlement was half of what Dominion sought.

  8. Understanding the last-minute settlement in Dominion's defamation suit against Fox News

    Used to provide context on the Dominion settlement being the largest of its kind at the time and the potential for the Smartmatic suit to yield an even larger sum.

  9. Fox News says Smartmatic was not harmed by its 2020 election reporting

    Used to cite Fox News's defence arguments, including the claim that Smartmatic was not harmed and that the network was reporting on newsworthy allegations.

  10. Fox, Dominion reach $787M settlement over election claims

    Used to explain the 'actual malice' standard (knowing the material was false or acting with 'reckless disregard') and the significance of the settlement as a consequence for lies.

  11. Smartmatic says evidence shows Fox execs didn't believe election claims

    Used to detail the 'unprecedented evidence of actual malice' from internal documents, citing admissions of disbelief from dozens of individuals across every level of Fox's organisation, including Rupert Murdoch.

  12. Lawsuit Updates - Smartmatic.com (Appeals Court Ruling)

    Used to cite the New York appeals court ruling that Fox Corporation must face trial, confirming the legal viability of the case against the parent company.

  13. Voting technology firm Smartmatic and Newsmax reach settlement in 2020 election defamation case

    Used to cite the Dominion settlement figure, the departure of Tucker Carlson, and the legal consequences faced by Rudy Giuliani and Sidney Powell.

  14. Smartmatic settles defamation suit against OAN over 2020 election claims

    Used to cite the confidential settlement between Smartmatic and One America News Network (OAN), further establishing the pattern of legal victories for Smartmatic.