Social media can be a powerful business tool to connect with customers, but improperly managing your social media platforms can lead to costly mistakes, PR nightmares, and even legal troubles. Whether you’re a small business owner or part of a large corporation, understanding these pitfalls is critical to protecting your brand, business, and reputation. Below are five common ways that companies can unintentionally create potential liability on social media.
1. Not treating your company’s social media posts as a form of marketing subject to various laws.
While many people think of social media as an informal method of communication, it’s a form of marketing subject to the same laws as traditional advertising. Posts cannot be false, misleading, or deceptive, and the company must have proper substantiation for any objective claims made about its products or services in the posts. Furthermore, companies should exercise caution when using disclaimers, especially on social media. Disclaimers hidden behind links or a “more” button (like on Instagram) will likely be insufficient.
Additionally, companies should be cautious about liking or sharing third-party posts containing objective claims about its products or services. Doing so could be seen as an endorsement of those claims, which means the company will need appropriate substantiation for such claims, as if the company itself made the statement.
2. Overlooking sweepstakes laws and other laws applicable to giveaways and other promotions on social media.
Companies often run promotions, such as giveaways, on social media to boost social media engagement, without realizing they are subject to laws governing sweepstakes, contests, and other types of promotions.
For example, if the winner of a giveaway is chosen randomly, the company cannot require “consideration” in exchange for entry. Moreover, laws can require official rules with specific provisions, but official rules are in any case a best practice. We can work with your company to prepare template rules for social media promotions that comply with law and help protect your company.
3. Not realizing your company can be responsible for its influencers’ and content creators’ content about your company.
If your company has a “material connection” to someone posting about your products or services, your company can be held liable for any failure by that post to disclose the material connection or if the post makes any unsubstantiated, objective claims about the company’s products or services.
Moreover, companies also have obligations to train their influencers and other content creators, and to monitor their posts for compliance with law. For these and other reasons, companies should formalize their relationships with influencers and content creators through contracts, including to give the company the right to require editing posts to comply with law. We can work with your company to create a template agreement for influencers and content creators.
4. Not obtaining appropriate rights when sharing third-party content.
Just because someone’s post is publicly available on social media does not mean it’s free to use. It’s crucial for companies to obtain all required permissions before sharing someone else’s content. And there could be multiple rights associated with a post, including copyright and publicity (name, image, and likeness) rights. These rights may even be owned by different people (e.g., if multiple people are featured in the post, or if the post featured third-party music).
In some instances, a license to repost content within the same platform may be implied, but best practice would be to obtain express permission to do so in all cases. And a license will almost certainly not be implied when sharing someone else’s content outside the same platform. Moreover, some states require grants of publicity rights to be in writing, meaning they can never be implied. We can work with your company on how you might go about obtaining these permissions.
5. Failing to comply with social media platform terms.
Each social media platform has its own terms of service that users must agree to in order to access and use the platform. These terms typically contain provisions requiring users to comply with law, to disclose material connections, and for any promotions on the platform, to expressly disclaim any affiliation with the platform owner (e.g., Meta) and release the platform owner from liability in connection with the promotion. Noncompliance can result in account suspension and other possible penalties. Because these terms can change frequently, it’s important for companies and their legal teams to regularly review and stay up to date with platform requirements.
If you have any questions or would like more information about any of the items addressed above, please contact Kasey Boucher Pierter at kboucher@pierceatwood.com.
