How to Avoid a Social Media Lawsuit?

How to Avoid a Social Media Lawsuit: Most Common Laws Broken by Businesses in Social Media

"It's very difficult to navigate legalities in social media," says Michael Germano, founder of Carrot Creative, a Brooklyn-based new media advertising agency. "Unfortunately, laws can be interpreted in so many different ways, and we run into obstacles often where we have one lawyer telling us one thing and another lawyer saying another. Nothing is really official."

That unknown legality and "a bit of a Wild West," as it's described by John Nadolenco, editor of The Social Media Revolution, means that companies are making plenty of mistakes regularly and they may not even know it. Here are some of the most common:

Copyright/Trademark: According to the United States Copyright Office, copyright is "a form of protection grounded in the US Constitution and granted by law for original works of authorship fixed in a tangible medium of expression." In social media, users and businesses upload content (photos, videos, etc.), often including copyrighted material. Do you have a legal right to repost a photo or video without proper attribution? Just because content is online does not mean it can be reposted. Every time it happens you are open to a $150,000 violation, but it's all about self-policing at this point.

"If you don't have the rights to use somebody else's property in copyright or trademark, you're opening yourself up to major legal liability," says Shear. "That's a big problem that needs to be addressed, and Congress is trying to figure out copyrighted and trademarked property online as we speak because it's being stolen left and right. People take other people's content without even thinking about it."

Trademarks, generally, are a form of legal protection that may be obtained to protect words, names, symbols or sounds that distinguish one particular good from another. In social media, falsely identifying yourself or misrepresentation could lead to legal liability. Do you have the right to promote the Super Bowl in your Facebook contest? Probably not, as brands pay lots of money for that exclusive right with the NFL.

FTC Advertising & Full Disclosure: Properly identifying yourself and offering full disclosure is not only recommended, but required by the Federal Trade Commission. If you're a company that is paying bloggers to write about your product or if you are a blogger writing about a product you've received for free or from a client, you need to disclose that information. Failing to do so amounts to improper and false reviews. Another simple way to look at this is your Twitter account: many employees who speak publicly about the company but also about their personal lives need to make it clear that they are employed by this organization but also that their thoughts are their own and not opinions of the organization, simple additions to a Twitter profile.

Privacy: Who owns the data that lives on the web? It's a question asked over and over and it has been for years. But with the rise of social media, users have become much more willing to share personal information—birthdays, addresses and phone number on Facebook, their present location on Foursquare, what entertainment they are currently watching via apps like GetGlue—all programs which collect information on each user. Who owns that data? And can you sell it to advertisers?

"The biggest problem to me is the use, storage and collection of data that is used in social media," says Shear. "Both user-generated content and content pulled from other platforms leaves you open to potential legal issues." 

Illegal Development: As Facebook continues to grow and expand their advertising platform, many brands are looking to run sweepstakes and ads on the site to reach individual and targeted consumers. But if you don't work with a Facebook-approved ad developers, not only are you not able to make money if you don't follow their rules, but you open yourself up to a potential legal issue.

"A lot of companies build Facebook ads with advertising companies that might not be approved by Facebook, and they're using wording or running contests that Facebook simply won't allow," notes Germano. "Everyone thought the Burger King Whopper Sacrifice back in 2009 was a great campaign, when in reality by Facebook rules it was illegal and eventually pulled. So dealing with an agency that knows the Facebook Platform, its nuances and the things that will send red flags to Facebook and get your app banned are huge from the start."

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