Fear, uncertainty and doubt (FUD) is a tactic of rhetoric and fallacy used in sales, marketing, public relations, politics and propaganda. FUD is generally a strategic attempt to influence public perception by disseminating negative information designed to undermine the credibility of their beliefs. An individual firm, for example, might use FUD to invite unfavorable opinions and speculation about a competitor's product; to increase the general estimation of switching costs among current customers; or to maintain leverage over a current business partner who could potentially become a rival. FUD techniques may be crude and simple. Alternatively they may be very subtle, employing an indirect approach.
The term originated to describe disinformation tactics in the computer hardware industry and has since been used more broadly. FUD is a manifestation of the appeal to fear.
Fear, uncertainty and doubt (wikipedia.org)
FUD /fuhd/ n. Defined by Gene Amdahl after he left IBM to found his own company: "FUD is the fear, uncertainty, and doubt that IBM sales people instill in the minds of potential customers who might be considering [Amdahl] products." The idea, of course, was to persuade them to go with safe IBM gear rather than with competitors' equipment. This implicit coercion was traditionally accomplished by promising that Good Things would happen to people who stuck with IBM, but Dark Shadows loomed over the future of competitors' equipment or software. See IBM. After 1990 the term FUD was associated increasingly frequently with Microsoft, and has become generalized to refer to any kind of disinformation used as a competitive weapon.
From The Jargon File circa 2001 (dict.org) latest