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Top Ten Things to Know About Advertising through Social Media
Jan 16, 2015
Top Ten
By Alicia B. Oliver, Chambliss, Bahner & Stophel, P.C., Chattanooga, TN
This resource is sponsored by:
By Alicia B. Oliver, Chambliss, Bahner & Stophel, P.C. , Chattanooga, TN
Social media is an inexpensive, yet effective tool for promoting your business; however, in the age of "going viral", social media posts
often take on a life of their own. Because negative posts can be extremely damaging and hard to effectively control after their release,
recognizing the legal issues that frequently arise in social media advertising is critical. Whether you manage social media
communications with an in-house digital department or through an outside vendor, educating your social media specialists about the
legal issues will help avoid liability in this area.
1. Commercial Social Media Posts are "Ads"
This means that posts are scrutinized in the same manner as other print, television, and other types of "Ads" under the law. The
Federal Trade Commission ("FTC") guidelines, the Lanham and Copyright Acts, and other federal and state laws, rules and guidelines
relating to deceptive advertising apply to your company's posts. At their core, these laws and guidelines require that posts not be
deceptive, misleading or unfair, and that claims made in posts be substantiated with evidence.
2. Giveaways, Contests, Sweepstakes and Other Similar Promotions
Just like those run in traditional media, social media promotions must comply with both state sweepstakes laws and with the social
media platform's specific rules. Every state has laws that govern how such promotions should be administered. Official Rules that
comply with these laws must be drafted and posted for viewing by entrants. Some states also have advertising requirements that may
require specific information be included in posts promoting the event. Most social media sites have their own set of guidelines as
well, which are updated periodically. For example, Facebook requires a release of liability and a disclaimer of affiliation/sponsorship
in your Official Rules. See https://www.facebook.com/page_guidelines.php Pinterest implemented a major overhaul of its promotion rules
in 2013, making many previously used methods invalid. Check the social media provider's rules well in advance to structure the
promotion properly and keep apprised of updates prior to launch.
3. Confidential or Embargoed Information
Many businesses protect ideas, data, and technology in the form of trade secrets. Social media personnel may have access to these
types of information and should be educated regarding the secrecy. Embargoed information might include an upcoming merger or
acquisition, a partnership with a vendor or a key hire/exit that is not ripe for public disclosure. Furthermore, sales figures and other
key information for publically traded companies must comply with certain guidelines prior to release. The Securities and Exchange
Commission recently green lighted disclosures in social media as long as investors are alerted prior to the disclosure.
http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171513574
4. Copyright & Trademark Infringement
Make sure you have the rights, either outright ownership or a valid license, to photos, videos, text and other content your company
posts through social media. Don't use other's trademarks without their consent. Make sure that the post doesn't imply a sponsorship or
affiliation with another brand that does not exist. "Fair Use" may apply in some situations but remember it is an affirmative defense,
so you still may have to go through the trouble and expense of litigating the issue. On the flip side, police the use of your brand and
content on social media sites. If you find copyright violations, use of the Digital Millennium Copyright Act's ("DMCA") takedown
notice procedures can be helpful to quickly remove content. Because the DMCA provides a safe harbor from liability, most providers
have an abuse reporting procedure and will respond quickly. DMCA takedown notices must contain: (a) name, address, and electronic
signature of the complaining party; (b) link to the infringing material; (c) identification of the copyrighted work(s); (d) a good faith
belief statement by the owner, or agent authorized to act on behalf of the owner, that there is no legal basis for the use of the
infringing materials; and (v) a statement that "the information in the notification is accurate, and under penalty of perjury, that the
complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed". Most providers also
have trademark abuse procedures which can be helpful to policing use of company marks. For example, Twitter's Trademark Policy is
found here https://support.twitter.com/articles/18367-trademark-policy.
5. Rights of Publicity and Privacy
These are a set of state laws that govern an individual's right to control the commercial use of his or her name and likeness. Right of
Publicity suits have been on the rise in recent years. For this reason, publicity releases and/or consents should always be used when
posting photos of third parties for commercial purposes. Also, don't imply affiliations or sponsorships of your company's product or
service that don't exist. When in doubt, get consent.
6. User Generated Content
Many social media platforms allow companies to invite their customers to engage with them on social media. Make sure to monitor
content for copyright and trademarks issues, obscene or defamatory material, and whenever possible, set your own terms and
conditions. For example, Facebook allows a company to set Posting Guidelines for its fan community. You can also provide a link to
your website terms and conditions, where you can include rules on social media usage and user generated content.
7. Endorsements/Material Connections
If you are hiring a third party to promote your product or service on social media, his or her social media posts should reveal this
connection. Several celebrities and their companies have recently been the subject of FTC investigations and enforcement actions.
This can often result in liability for the endorser and the company. The FTC updated its Endorsement Guide in November 2014 to
include guidance and examples for endorsements through social media.
http://www.business.ftc.gov/documents/bus71-ftcs-revised-endorsement-guideswhat-people-are-asking
8. Direct Messages/Inboxes, etc.
If you are sending advertisements, special offers, coupons or other types of promotions through a social media site's direct messaging
platform, these communications should comply with the CAN-SPAM Act. Certain types of information, such as the company's
physical address and a way to opt-out for the recipient, should be included in the message. The FTC has a compliance guide for
businesses located at http://www.business.ftc.gov/documents/bus61-can-spam-act-compliance-guide-business
9. Privacy and Data Security
Collection of and use of data is an excellent tool, and most companies are using some sort of data collection to tailor advertising to
each social media users' specific interests, i.e., online behavioral advertising. Companies should make sure that their use of social
media comports with their own privacy policy, such as properly disclosing data collection, storage and usage practices, as well as
complying with the privacy policy of the relevant social media provider. It is also important to keep abreast of the FTC's treatment of
online behavioral advertising. While there is no specific federal law governing online behavioral advertising, there are several
"self-regulating" guides, and the FTC has also released recommendations over the last few years. Companies with products marketed
to children should also make sure social media usage complies with the Children's Online Privacy Protection Act ("COPPA") and the
Children's Advertising Review Unit ("CARU") guidelines.
Children's Advertising Review Unit ("CARU") guidelines.
10. Records Retention & Spoliation
Ensure retention of records relating to your company's social media usage is consistent with your company's record retention policy
and any litigation holds. Deleting social media posts can be considered spoliation under certain circumstances resulting in negative
inferences and/or monetary sanctions. See, e.g., Lester v. Allied Concrete Co., Case No. CL08-150 (Va. Cir. Ct. 2011) (imposing
monetary sanctions for deletion of Facebook account).
Conclusion
Most of the above issues can be minimized by education, implementation of social media policies and procedures for employees and
vendors, and carefully drafting promotion rules, publicity releases and related documents. While it's certainly not practical or cost
efficient to review every post prior to publication, a periodic audit by both the law department and outside counsel, and a detailed
review in advance of major promotions and sponsorships can be an effective means for managing the risks.
The information in this Top Ten should not be construed as legal advice or legal opinion on specific facts and should not be considered
representative of the views of its authors, its sponsors, and/or the ACC. This Top Ten is not intended as a definitive statement on the subject
addressed. Rather, it is intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.
Reprinted with permission from the Association of Corporate Counsel (ACC)
2014 All Rights Reserved.
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