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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.

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 any resource collected in this virtual library 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 ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.
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