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Social Media Legal Risks: Seven Ways to Maintain Social Media Marketing Legal Compliance
| Guest post by: David M. Adler |
Article Overview: In October 2009, the Federal Trade Commission released it's updated "FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising." The purpose of the update was to address the increasing use of endorsements by consumers, experts, organizations and celebrities in online marketing. The update is particularly relevant to the explosive growth of social media as a marketing tool.
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Free Download - Failure to Prosecute Infringers Will LEad to Loss of Trademark Rights By David M. Adler |
Social Media Legal Risks: Seven Ways to Maintain Social Media Marketing Legal Compliance
The updated FTC Guides contain two notable areas of concern for
marketers. First, the Guides removed the safe harbor for advertisements
featuring a consumer's experience with a product or service, the so-called
“results not typical” disclosure. Second, the FTC Guides underscored the
longstanding principle of disclosing "material connections" between
advertisers and the consumers, experts, organizations, and celebrities
providing reviews and endorsements of products and services.
Even with the illustrations provided within the FTC Guides
themselves, it is still confusing for advertisers, marketers, bloggers and
social media users to know how to comply with the guidelines. The purpose of
this article is to provided simple, concrete standards to determine (1) when to
make certain disclosures and (2) the type of disclosures required by the
situation. I have grouped the disclosure into seven categories: Personal
Opinion, Free Sample, Free Gift, Promotional Relationship, Employment
Relationship, Affiliate Relationship, Healthcare Disclosures, and Financial
Guidelines & Disclosures. The key requirement to keep in mind is the
obligation to disclose any relationship that may have influenced you.
1. Personal Opinion
If you write a review or blog post and your post contains only your
own opinions, you haven't received any compensation for the review or post, and
you otherwise have no material connection to the topic of your post, you have
nothing to disclose.
2. Free Sample/Free Gift
If you have been given a free copy, sample, or gift of a product or
service and you write a review or blog post, you must disclose the facts and
circumstances of how you received the item or service, even if you have not
been paid to review or post on that topic. You do not run afoul of the
disclosure rules if you receive payment unrelated your content. This disclosure
is useful to keep in mind when your content relates to product previews,
reviews of samples, services, gifts, books, software, music, movies, etc.
3. Promotional Relationships
If you write a review or blog post and your post is based upon an
advertising relationship, and you have received compensation (cash, free
services, product samples for personal use or a gift) for the review or post, you
must disclose the nature of the relationship, whether you received anything of
value, and information about relationships with advertisers or endorsers
that would have a material impact about how a prospective consumer would view
the message. This disclosure is useful to keep in mind when your content
relates to paid posts, sponsored messages, tweets, fan page postings, etc.
4. Employment Relationships
If you write a review or blog post and your post is based upon an
employment relationship, e.g. you are an employee or shareholder of a related
company, you have a "material business relationship" to disclose,
even if you are not being directly compensated for the message. You may post on
behalf of a business or brand. In fact, it may even be part of your job
description. Again, be mindful of the requirement to disclose any
"connections" that may have influenced you, including both direct
and indirect relationships.
5. Affiliate Relationships
If you write a review or blog post and your post is based upon an
affiliate relationship, e.g., you have included affiliate links on your page, you
must disclose the fact that the relationship exists and that you will be paid
for referrals from your page.
6. Healthcare Disclosures
If you write a review or blog post and your content is based upon a
connection to a pharmaceutical or healthcare product or program, you need to
include relevant healthcare-related disclosures or information safety warnings,
side effects, or official links with information.
7. Financial Guidelines &
Disclosures
If you write a review or blog post and you work for a financial
services company, you may be making investor-relations communications and your
communications are subject to regulation by the NASD, SEC, FINRA and
potentially state and federal regulatory agencies. The FINRA Guidance on Blogs &
Social Networking Sites” can be found here. Record Retention: ensure that you can retain records of those
communications. Suitability: a
particular communication a “recommendation” for purposes of NASD Rule 2310 and
is it suitable for potential recipients. Public
Appearances: determine whether your
post part of an “interactive online forum” and whether supervision is required.
Third-Party Posts: If your firm
created or “sponsors” and online forum, be aware that, under certain
circumstances, a customer’s or other third party’s content on a social media
site may become attributable to the firm. Whether third-party content is
attributable to a firm depends on whether the firm has (1) involved itself in
the preparation of the content or (2) explicitly or implicitly endorsed or
approved the content.
Clearly, legal and regulatory compliance for social media remains a
minefield. Although this article is intended to give you a working knowledge of
the types of risks created by, and disclosures required for, the use of Social
Media, it is NOT LEGAL ADVICE. Each situation is unique and you should consult
with qualified legal counsel regarding your specific circumstances.
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Social Media Marketing for Accelerating Your Business
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About the Author: David M. Adler RSS for David's articles - Visit David's website Click here to visit David's website   Types of legal business structures TRADEMARKS IN CYBERSPACE Lawyers Top 10 Tricks for Managing IP Social Media Legal Risks Seven Ways to Maintain Social Media Marketing Legal Compliance Failure to Prosecute Infringers Will LEad to Loss of Trademark Rights |
Related Forum Posts
Re: Kevin needs "social glue" ideas
- Hi,
I like the idea of "10 items that could act as "social glue" because I am an internet marketer. But I agree with the rest that the 10 recent post is nice. Maybe we should open up a new section in the forums on Social Media...or Social Media Marketing.
I will tell you that the world is about 1 1/2 behind when it comes to understanding social media. Building a section now will put EvanCarmichael.com is a great position a year down the road when people realize Social Media can produce more traffic than SEO.
Jeff
Re: Kevin needs "social glue" ideas
- [quote="WebBizIdeas.com":gvtxsu7g]Hi,
I like the idea of "10 items that could act as "social glue" because I am an internet marketer. But I agree with the rest that the 10 recent post is nice. Maybe we should open up a new section in the forums on Social Media...or Social Media Marketing.
I will tell you that the world is about 1 1/2 behind when it comes to understanding social media. Building a section now will put EvanCarmichael.com is a great position a year down the road when people realize Social Media can produce more traffic than SEO.
Jeff[/quote:gvtxsu7g]
Hi Jeff,
Thanks for the suggestion. Why don't you start a new post (with a poll) to see if there's enough interest in your idea for a social media section?
Re: UPDATES: New Campaign! New Layout! New Ideas!
- GT - thanks for the FYI - I'm not sure if we'll put a link back. Something to consider though!
Trent - the new category is "Social Network and Media" which was put in to compliment the Online Businesses category that currently exists.
Overall the new categories are:
- Looking For, Networking and Events
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- Social Network and Media
- Brags and Rants
These came as a result of Ringo doing research on other forums and thinking about what could be improved on ours to give a better experience for everyone. I hope you enjoy them! David, I'm looking forward to reading your Brag / Rant!
Re: Marketing 2.0 - What Are Your Thoughts
- Hi Shri,
Thanks for posting this.
I also read it and I believe Social Media is here to stay, until the next best thing comes up. Social media proved to be useful for me many times and I think everyone should use it for their business.
Re: Social Media Marketing Ignorance
- [quote="vbn411":7qciluxl]Social Media is space that you have to be in to succeed in our current climate. People are going to be discussing your brand / product whether you like it or not, so you might as well join the conversation and add value. [/quote:7qciluxl]
I think that's probably one of the most realistic way to think about it.
There's no real textbook way of understanding Social Media, it's the networks of people and their interactions that will exist with or without your input.
As for Jennifer,
You can always have 2 Facebook pages. Many people do. There is also LinkedIn, which is like a professional networking version of Facebook.
The only way to know is to try it.
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