Social Media Laws: Avoid these common business mistakes on social media.
Social media seems like fun and games—until it isn’t. There are many legal mistakes that small business owners make daily on social media. Most of the time, they are lucky enough to get away with them. But as the FTC continues to crack down on influencer marketing and sponsored posts, more people are paying attention to what they are posting. If your social media agency isn’t trained in the legal ramifications of social media activity, you can still be held liable if the posting is done from your account. I spoke with three leading social media attorneys for a rundown on the legal mistakes you are making on social media and how to avoid them.
1. Not understanding copyright law. Photographs are protected by copyright law, but it is often difficult to ascertain who owns the copyright to the photograph. Is it the photographer? The person who posted the photograph? Or the person shown in the photograph? It could be any of the above. New York-based Advertising Law attorney Kyle-Beth Hilfer says user-generated content from consumers can expose a company to legal liability for embedded intellectual property infringement. “When using photographs on Instagram for commercial purposes, the poster should make sure that it has the proper licenses to the photograph. This is easy if you’ve taken the photograph yourself and post it directly to your own account. It’s often more difficult to ascertain who owns the copyright to a photograph that you are taking from elsewhere. You also want to make sure that you have appropriate releases from anyone shown in the photograph so their rights of privacy/publicity are not violated.”
2. Regramming without attribution. Thinking of regramming a photo a customer took at your restaurant? Be sure to provide proper regram credit and attribution. “Regramming a photo with attribution may be acceptable, but it may not. If there is a creative commons license attached to the photo that allows for use with attribution, that’s great. But more often, the content on Instagram isn’t sourced by these apps with this in mind. Giving attribution mitigates against copyright infringement damages, but it doesn’t completely solve the problem,” says Hilfer. She adds that brands using Instagram should also develop internal content curation guidelines that account for risk in a variety of different categories.
3. Failure to properly disclose influencer marketing campaigns. Business owners should be aware of recent FTC guidance urging transparency on Instagram. In April, the FTC sent over 90 letters to companies, celebrities and other social media users reminding them of the legal requirements for clarity in influencer marketing. According to Hilfer, endorsers must disclose their material connections to the brand. The federal agency offered specific guidance on how to do that. For example, any disclosure should be placed before the “more” button since many consumers will not click through. In addition, the FTC warned that certain kinds of hashtags would not be clear disclosures. Marketers should work with their legal teams to ensure that influencers, whether they be employees or third parties, make proper disclosures on Instagram and any other social media platform. Penalties for violating FTC guidelines have ranged from $20-$50,000 with a range of other requirements for compliance. The FTC can pursue legal action against both the brand and the influencer.
4. Improper formatting of sponsored posts. The FTC has cracked down on influencer marketing campaigns, including the exact formatting of these posts. According to Hilfer, the mere presence of a disclosure may not be enough to satisfy the FTC. If the post contains multiple hashtags, links or tags, you must separate the legal disclosures to make sure they are clear and conspicuous. “If an influencer includes ‘Thanks [Brand]’ or #sp or #partner, these notations may not clearly indicate to the consumer that the post is sponsored. You have to put yourself in the mindset of the consumer seeing the post,” said Hilfer. While the FTC has been clear that there are many acceptable ways to make disclosures, it explains that any term that has many interpretations will not provide the appropriate clarity.
5. Assuming your social media agency understands legal. Your social media agency is probably amazing at the creative work they do. But unless they have substantially invested in legal training, chances are they are not well versed in what could get your business in hot water. It is incumbent upon brands to make sure they are working with agencies who are cognizant of the law. For example, if a mistake is made on your company’s social media, is it clearly outlined that the agency will take the legal and financial responsibility for the risk? Or are you assuming the risk? “Not having appropriate contracts when working with third-party content creators is one of the biggest mistakes I see,” says Social Media Attorney Ruth Carter of Venjuris. “In many cases, unless the contract states otherwise, the creator retains ownership of the copyright in their work, and if the hiring party wants to acquire it, they will likely have to pay for it. Additionally, I recommend that the hiring party have an indemnification clause to protect them if they are accused of intellectual property infringement or other wrongdoing because of the content provided by the third-party creator.”
6. Fake testimonials. Testimonials are great for building trusted authority as an expert. However, they can also land you in hot water with regulators who are watching out for fake testimonials on social media. According to Hilfer, “State attorney generals are enforcing laws against this practice, known as astroturfing. In New York, fines resulting from such investigations have been up to $50,000. In one case, the state settled for $100,000 with a brand that had instructed its ad agencies to post fake reviews online. Influencer marketing can have expensive legal ramifications for a brand if done improperly.”
7. Not reading the terms of service. For any social media platform, check the rules in their terms of service. The legal ramifications vary on each social platform. Many social media sites’ TOS state that you agree to only post images for which you own the copyright or for which you have permission to post. “The terms may state that by posting an image, you give other users permission to share the image on their profiles on that platform (ex. sharing on Facebook.) If you want to use the image of another person in your Facebook ad campaign, be sure to familiarize yourself with the applicable state laws on a person’s rights to publicize their image,” said Carter.
8. Reusing someone else’s license to a purchased stock photo. You found the image you were about to purchase on iStock through Google images (for free!). You directly pull the image onto your desktop and upload it into your content queue for the week. However, this mistake can be costly. According to Carter, you can only use images that you’ve received permission from the copyright holder, either directly or via a license like Creative Commons. “For iStock photos, read the license the person purchased. Your use must comply with the limits of that license. If your third-party creator bought the license, make sure it allows you to use it without having to buy your own license. Many of the agreements between independent contractors and the hiring party state that the contractor isn’t the company’s agent, so they can’t make purchases for the company. Unless the license for the image is transferable, the company has to buy their own license unless the terms of the license state that the agent’s license is sufficient,” says Carter. If you want to use an iStock image, buy your own license and avoid the risk.
9. Not having an internal social media policy. As personal branding and social media become more ingrained in our society, it is imperative to have a social media policy and a promotional clause as part of your employment agreements. For example, if your employee is promoting herself as an expert in the same line of work that you are in, is this a conflict of interest or is it acceptable? If the employee is using social media (LinkedIn) to pursue outside job opportunities while on the clock, are you protected? If the employee builds a substantial following on social media while working for your organization, who owns the rights to this fan base? Many business owners don’t anticipate these issues, and the hiring and firing surrounding these issues can often result in wrongful termination lawsuits. Adam Katz, an employment law and commercial litigation attorney at Golderg Segalla, says that most employers don’t realize they can be held liable if they terminate employees for certain posts and social media activity pertaining to salary and other work conditions. “An employee can bring a lawsuit for wrongful termination and discrimination if they believe they were fired for something that a supervisor saw on social media but otherwise would not have known.” Katz emphasizes that employers need carefully tailored social media policies that limit a supervisor’s social media activity with employees. “A good policy will state that while employees are allowed to associate themselves with the company when posting, they must clearly brand their online posts as purely their own. Additionally, the policy should make provisions for reviews and editorial rights of all posts or blog entries that reference or pertain to the business of the company. The social media policy should also prohibit employees from using derogatory words and racial slurs and from divulging confidential company information such as design plans, internal operations, and legal matters,” says Katz.
10. Pulling content from Google Images. Many small business owners do not have subscriptions to iStock or Shutterstock, so they pull whatever they can find from Google Images. However, Google Images is not a free library. This mistake can be extremely costly. Not only will you incur legal fees if the originator of the content decides to come after you, you also may be liable for treble damages under copyright law. “Possession does not yield copyright ownership. There is no 10 percent or 20 percent rule that allows one to take a certain percent of content and use it without a license. This is particularly the case for commercial purposes. The fair use defense requires significant legal analysis. It may not be available, depending on the facts of each case,” explains Hilfer.
11. Not budgeting for legal recourse. Posting on social media may be free, but paying the fees associated with a lawsuit spurned by social media gone wrong is anything but that. According to legal experts, social media lawsuits can cost small business owners upwards of $100,000. Many small business owners do not budget for the cost of an attorney if something goes awry with their marketing campaign. “Suing for infringement is complicated, and you have to be ready to front the costs of litigation, even if you’re in a situation where you are likely to be awarded attorney’s fees if you win. If the other side doesn’t have money, you may never collect, and you still have to pay your lawyer. For many people, sending a cease and desist or a DMCA takedown notice is the more effective and cost-efficient way to proceed,” says Carter.
12. Making employees promote your company on their personal social media profiles. As a small business owner, your employees are a critical component of your social media strategy. After all, the millennial in your office has way more Facebook friends than you and can definitely increase engagement on your posts, right? Wrong! According to Carter, there is a big difference between making content available for employees to post on their social media profiles if they want to and requiring them to do so. Carter explains, “The former may be permissible; the latter is not. Review the terms of the social media platform where you want employees to promote the company. The platform may forbid people to use their personal accounts to promote a business.” Next time you want to terminate an employee for not complying with your request to promote the business on social media, understand they may be able to bring up an actionable claim against you. If they suspect they are being asked to violate the terms of the platform, they can report their employer to their state’s Department of Labor or the Attorney General’s Office.
13. Running a social media sweepstakes without legal clearance. Everyone loves to win a prize, and involving your followers on social media in spreading the word about your product is great publicity. But running a sweepstakes or contest on social media without understanding the legal issues can cause big problems. In fact, sweepstakes and contests consistently rank in the FTC’s annual top ten list of consumer complaints. And regulators are watching how brands implement them closely. Hilfer explains, “Social media sweepstakes raise legal issues with gambling and lottery laws. Often, brands forget about drafting rules. Or they take form rules that don’t cover them adequately. Refer a friend, text to enter, public judging: all these mechanisms have legal implications that can make your giveaway illegal.” In addition, even if you’ve done everything correctly to set up the promotions structure and draft rules, your marketing messages promoting the game can still get you in trouble. The FTC has numerous guidelines that affect how you spread the word about your prize promotion, and the various state attorneys general enforce state laws that mirror the federal rules. According to Hilfer, “You will want your marketing teams advertising and promotion of the game to match up with the legal rules. This often means crafting disclosures in space-constrained posts. Ideally, marketing teams will plan ahead and work hand in hand with legal counsel to pre-approve messages.”
Don’t assume you understand the legalities of social media. Read the applicable terms of service and work with an attorney to understand the legal ramifications before clicking post.
Kris Ruby is the CEO of Ruby Media Group, a Public Relations and Social Media Agency. Kris Ruby is a frequent on-air TV commentator and speaks on social media, tech trends and crisis communications. For more information, visit www.rubymediagroup.com or www.krisruby.com
Disclaimer: Ruby Media Group is not an attorney and this post does not constitute legal advice. You should always contact your attorney to discuss your specific legal questions and legal counsel.