Social Media from the Legal Perspective

If you like this post, say thanks by sharing it.

We hear so often about Social Media from the technological or strategic viewpoint that I was not quite sure what to expect from the GSMI’s (Global Strategic Management Institute‘s) event, “Social Media: Legal Risks & Strategy”.   While many of us are understandably excited about the promise and the opportunity of social media, the legal aspects are ignored at our own peril.

Although we may tend to think of the legal issues of social media in terms of the obvious ones: opt-in policies, privacy issues, things not to say on Facebook or elsewhere, this GSMI program served to enlighten attendees to a broad range of legal considerations to think about when embarking on a social media strategy.  (Disclosure: GSMI extended a ticket to me in exchange for SMB Research promotional consideration.)

The program content at times drifted into the realm of what I would call legal nuance.  (Quick, who knows what these are: The Right of Publicity, Lanham Act, CAN-SPAM, or the implications of commercial speech?)  The legal profession would, of course, not agree, and it is tough to argue the the advent of social media is not opening up the proverbial can of worms and a proliferation of novel legal issues.  American Express‘ Mark Bisard provided the list of issues that American Express pays attention to:

  • Privacy, Data Security, Data Breach
  • FTC issues
  • Authority issues/ Contracting issues
  • Reps and Warranties
  • Defamation/ Trade libel
  • Confidentiality & Trade Secret
  • Monitoring, Surveillance
  • Harassment, Employment law issues
  • Advertising laws
  • IP infringement, ownership & protection
  • Right to Publicity
  • Whistleblower
  • Labor laws
  • First Amendment
  • Export Control & other int’l issues
  • SEC issues (Reg FD / FINRA) (disclosures of material, non-public, info & forward looking statements)
  • Health law issues

Among other things, a session like this heightens your sensitivity to the issues and the value of preemptive and prevention-oriented action.   Given that basic contract disputes can take 28 months to resolve in court, and the Better Business Bureau’s National Advertising Division’s Senior attorney, Kathryn Farrara said that she and their team of 8 attorneys handle some 150 cases per year, the “ounce of prevention” maxim applies here.   This GSMI event demonstrated to me that there are some very bright legal minds working to understand the implications of this new social media world.   (Apologies to American Express’ Mark Bisard who suggested that it is time to stop using the word ‘new”.)

A couple of the highlights of the program (altogether, a strong line-up of speakers)  for me were Kyle-Beth Hilfer talking about prize promotions and social media, and Proskauer‘s Jeffrey Neuberger talking about location-based marketing.

In this promotion-crazy age that we seem to be living in, when there are an endless stream of marketing promotions being created, the social media must seem like a dream come true for many in the marketing profession.  Accordingly, Ms. Hilfer’s was a fresh perspective on what is allowed and what is not , from the legal perspective, starting with what is a legal prize promotion, independent of the platform:

Prize +
Chance + = Illegal Prize Promotion

In order for a prize promotion to be legal, there can be no more than two of these elements:

Prize + Chance = a sweepstakes
Prize + Consideration = a skilled context
Consideration only (no chance / no prize) = a premium

There are, in fact, legal “rules of the road’ where it comes to using the various forms of social media for contests.  Not all of them are as firmly established and articulated as those of Facebook, which just issued new rules effective May 11, 2011.    YouTube provides community guidelines and requires that you indemnify YouTube.  Twitter offers best practices, most obviously to control traffic (a relevant case study is the 2009 Moonfruit contest.).  Foursquare has its own peculiarities about the permissions frm them that you need or don’t need.

Facebook’s new guidelines deserve close attention.  One of the most important things to know is that you cannot administer the promotion directly through Facebook, using Facebook as either the registration or entry vehicle.

A particularly noteworthy example of the use of social media cited by Ms. Hilfer is the Tasti D-Lite‘s TreatCard , using several different aspects of social media in a creative and thoughtful way.

Proskauer’s Jeffrey Neuburger brought to the session 71 slides on the legal risks of location-based marketing, which could prove to be an area of some interesting case law in the near future.  He talked at length about what the world has wrought with the advent of GPS, location-based marketing, and the use of locational data.  When doing on-location marketing, Mr. Neuberger advised that you must “obtain specific consent to the collection, use and sharing of locational data”.  (And, to think, here I am, worried about the fact that the Google Maps camera car drove by house when my garage door was open, allowing the world to zoom in to see, without my consent, everything in my garage.)

Mr. Neuberger also referenced foursquare’s recently-updated “Privacy Grid“, which in its clarity and user-friendliness may set a new standard.  (But am I the only one who finds some irony in the fact that we are talking about the privacy policy of  foursquare, whose very existence depends upon the willingness of people to broadcast where they are?)

Finally, the two sponsors warrant mentioning.

Actiance (as in ‘active compliance’) is a 13-year-old firm, who was known as FaceTime until Apple made it worth their while to turn this name over to Apple, giving them the opportunity to take on, as it happens, a better name, anyway.  Actiance provides solutions for monitoring and archiving social media traffic.  They have been targeting their solution to the financial and insurance markets, where regulatory pressures fuel their business.

CMPLY, also a sponsor, has an intriguing-looking solution for disclosures of material connections and influences for bloggers and those involved in social media.  I was very interested to talk with Tom Chernaik, CMPLY’s CEO, at the session, and will hope to have a further update for you soon.  Be sure to check back.

The speakers:

Leave a Reply