Top 5 Legal Issues You Should Consider with Social Media Marketing

5 top legal issues for social media

Today, most companies use social media marketing as a part of their marketing efforts to establish an online presence and disseminate information about their products and services. However, not all businesses realize that, in most situations, social media marketing activities should be compliant with federal regulations. 

It is advisable to consult with experienced business lawyer to avoid general pitfalls and ensure compliance while pursuing social media marketing. Here is a short overview of some of the main legal issues that should be accounted for when creating a social media campaign or even just publishing a new post on Facebook or Instagram.

 1. Federal Compliance for Regulated Businesses 

Following the increased popularity of digital media among businesses as means to communicate with customers, investors, and the general public, the Securities and Exchanges Commission has adopted the Regulation Federal Disclosure (Regulation FD) in the year 2000.  In its later statements, SEC has made it clear that Regulation FD is applicable to companies’ pages on social media in the same way as it applies to company websites.

One of the main goals of the new Regulation was to avoid selective disclosure of information, providing an unfair advantage to selected individuals who may profit from such information at the expense of others. Regulation FD applies to security issuers,  broker-dealers, investment companies and other types of regulated businesses that are employing SMM as a part of their marketing efforts.

In addition to Regulation FD, regulated businesses should be compliant with other federal rules, including applicable FINRA regulations and notices, Securities Act of 1933, SEC rules as to proxy solicitation, and other requirements that may regulate corporate SMM activities.

 2. Intellectual Property Rights 

When sharing information on social media, businesses should use their own copyrighted content and watch out for third party intellectual property infringements. 

While companies should prevent illegitimate use of their content by others, they should promptly react to complaints and quickly remove any unauthorized texts, images, and videos to avoid negative legal consequences.  Such instances may include using any logos, signs, or other content that belongs to third parties and are used in violation of copyright regulations.

3. Accuracy of Statements, Infringements, Defamations

Since in some instances a company’s message on social media can be viewed as formal disclosures, businesses should consider relevant posts on Facebook, Twitter, Instagram or other platforms as an official statement. Such posts and messages should be checked for compliance with legal consultants before publication.

Meanwhile, company employees and vendors responsible for social media marketing should avoid any misleading or defamatory messages and always make sure the company has enough proof to back any of its statements. The same principle relates to conversations in Facebook chats, tweets and comments on Instagram and or any other media in relation to the company’s business. At our Tampa business law firm, we offer customized social media policies for our clients that comply with their specific business practices and respective industries.

4. Disclosure of Endorsers 

In an effort to engage a wider audience, many businesses use the services of endorsers to promote their projects and products through additional social media channels. Meanwhile, such endorsers must disclose their connection with the businesses they promote to ensure compliance with the guidelines of the  Federal Trade Commission (FTC). 

It is advisable to have a formal agreement with any endorser outlining the terms and requirements to follow to avoid adverse legal consequences. Such endorsers should clearly disclose their connection regardless of the type of compensation they receive, including monetary payments, special preferences, discounts, and other benefits. Hiring a business lawyer to handle the formal agreements is highly advisable. Violations of FTC regulations expose companies to heavy fines that sometimes result in a company going bankrupt.

5. Observance of the Terms of Service and Privacy Policies

the legal relationship between them and their users. Although such terms have much in common, there are certain differences that should be accounted for when outlining any social media marketing strategy for each platform.

For example, those companies that use Pinterest may re-pin images posted by other users while on Instagram such practice may lead to copyright issues. There are other subtle differences among different platforms outlined in social media Terms of Service and Privacy Policy documents, which should be accounted for when posting. At our Tampa law firm, we review the terms and policies for our clients to assist them mitigate their liability exposure with each social media marketing campaign.

Top 5 Legal Issues You Should Consider with Social Media Marketing 1

Summary

Given the importance of social media marketing for corporate marketing and the number of federal regulations applicable to communication on social media, it is advisable to involve an experienced Tampa business lawyer to ensure compliance with the company’s corporate policies for their social media marketing strategies.

Companies are advised to set up a predefined set of rules for their employees or third-party vendors responsible for their social media marketing activities to ensure compliance and avoid legal issues when using social media.