A recent district court case reminds companies and brand owners to establish clear guidelines or contractual rights with respect to brand-related social media pages' administration and ownership.
Plaintiff Stacey Mattocks independently ran an un-official Facebook fan page which focused on the TV show the "Game". After Black Entertainment Television network (BET) acquired rights to the TV show, it hired Mattocks to promote and grow the brand on the page and provided exclusive content and IP to Mattocks. During Mattocks' employment, the number of page "likes" grew from 2 million to 6 million. Mattocks had granted BET full access to the page to update content but later, during a dispute involving Mattocks' terms of employment, Mattocks demoted BET's ability to access the page without her approval and claimed ownership of the page. BET approached the social media platform to regain control and Mattocks filed suit for various claims against BET (such as breach of contract and tortious interference with contract).
While social media platforms offer certain protections to companies and some include official or verification procedures, this kind of litigation and expense could have been avoided with more careful planning with respect to allocation of rights and ownership up front.… Continue Reading
A recent Facebook Platform Policy change may affect the way many promotions are run on Facebook. The change, effective November 5, 2014, prohibits Facebook Page owners from requiring a user to "like" their Page in order to access content, such as entry into a contest or sweepstakes, via a Facebook application ("App"). Advertisers often use this technique, known as "like-gating," as a way to increase the amount of likes their Pages receive.
Facebook believes that a prohibition on like-gating will benefit both advertisers and consumers. In announcing the change, Facebook stated in a blog post: "[T]o ensure quality connections and help businesses reach the people who matter to them, we want people to like Pages because they want to connect and hear from the business, not because of artificial incentives."
A like can be valuable to an advertiser, regardless of whether it is generated organically or artificially. When a user likes a Facebook Page, the like may appear on the user's Timeline, stories from the Page may show up on the user's news feeds, and users may also appear in advertisements for that Page.… Continue Reading
Last month, Snapchat reached a settlement with the Maryland Attorney General over alleged deceptive trade practices regarding Snapchat's marketing claims that user "snaps" disappear forever. In addition, the Attorney General alleged that Snapchat had violated the Children's Online Privacy Protection Act (COPPA). This settlement follows a similar settlement between Snapchat and the Federal Trade Commission, which we reported on previously.
After announcing the settlement, Attorney General Douglas F. Gansler said that "despite Snapchat's marketing claims to the contrary, no company can fully prevent content you send to someone else from being copied, shared or posted online[.]" Attorney General Gansler went on to state that companies operating online or through mobile devices have a responsibility to safeguard user privacy and to be transparent about the information they collect. According to Attorney General Gansler, Snapchat misrepresented to consumers that pictures and video messages sent using the Snapchat mobile application are only viewable temporarily, when in fact they can be captured by the recipient for future viewing or circulation. As a result of these representations, some Snapchat mobile application users may have sent pictures or video messages they would not have sent were these risks adequately disclosed. The Attorney General further alleged that Snapchat secretly collected information from users' contact lists without their consent, and that Snapchat failed to comply with COPPA by knowingly collecting the personal information of children under the age of 13 without verifiable parental consent.… Continue Reading
While social media has matured over the past decade as a marketing platform, it is still very much a legal work in progress. Join Reed Smith partner and ANA General Counsel, Douglas J. Wood, on Tuesday, July 29 at 1:00 p.m. EDT for a complimentary webinar entitled Social Media's Murky Legal Waters to hear what legal risks lie ahead for marketers operating in the social media space, and how they can work to build powerful creative while keeping those risks within reason.… Continue Reading
The FDA issued two draft guidance documents on social media last week. The first guidance pertains to product claims and risk information on platforms such as Twitter and Google's sponsored links, while the second guidance covers correcting misinformation that originates from independent third parties on the Internet and social media sites. The FDA has opened up a comment period and will be accepting comments until September 16, 2014.… Continue Reading
On May 21, 2014, Oklahoma enacted H.B. 2372, following the trend outlined in our earlier article on the growing number of states prohibiting employers from requesting employee or applicant social media account passwords. H.B. 2372 prohibits employers from requesting or requiring the user name and password of employees' or applicants' personal social media accounts or demanding employees or applicants to access the accounts in front of the employer. The law also prohibits employers from firing, disciplining, or denying employment to employees or applicants who refuse to provide the requested information.… Continue Reading
Last Thursday, the Federal Trade Commission (FTC) announced that messaging app Snapchat agreed to settle charges that it deceived consumers with promises about the disappearing nature of messages sent through the app. The FTC case also alleged that the company deceived consumers over the amount of personal data the app collected, and the security measures taken to protect that data from misuse and unauthorized disclosure. The case alleged that Snapchat's failure to secure its Find Friends feature resulted in a security breach that enabled attackers to compile a database of 4.6 million Snapchat usernames and phone numbers.… Continue Reading
The FDA recently issued a warning to a Swiss drug company for failing to include on its Facebook page a product's risk information and limitations. Although this type of enforcement activity involving drugmaker conduct on social media has been rather uncommon, it is a stern reminder for companies that the FDA is monitoring activity, and that its marketing and advertising rules apply to product promotion over social media networks as well. For additional information on this story, read the latest post on our firm's Life Sciences Legal Update blog.… Continue Reading
As part of the American Bar Association's Consumer Financial Services Committee monthly webinar series, Reed Smith attorneys Stacy K. Marcus and Travis P. Nelson will be leading a discussion tomorrow, Wednesday, February 12, 2014, examining the effect of social media on the consumer finance industry, including how social media can and should be used by the industry and how to apply existing laws to this dynamic and evolving medium.… Continue Reading
In an effort to make administration of promotions on Facebook easier, the social media site released new rules permitting Facebook Page owners to host promotions and giveaways on their Page timelines. While hosting a promotion on a Page timeline is certainly more convenient and likely more cost effective for businesses from an administration standpoint, it does have disadvantages that businesses should keep in mind, such as the inability to require users to agree to Official Rules of the promotion and the inability to collect personal data about participants.… Continue Reading
The ASA has released a survey which was commissioned to establish what advertisements were being accessed and seen by young people online. The 27-page survey focuses much of its attention on the engagement by young people of social media platforms and, perhaps unsurprisingly, establishes that a significant proportion of young people register with social media … Continue Reading
The NLRB’s General Counsel’s office recently released its latest Advice Memorandum on social media, publicizing its position that employers may not unilaterally implement social media guidelines without first bargaining with unions. In addition, the Memorandum determined that a rule prohibiting photographs or videotapes of the employer’s premises to also be unlawful, finding that such a … Continue Reading
Kim Kardashian is notorious for setting Twitter trends with her fashion-forward tweets. But would a consumer buy the same product knowing she was paid up to $20,000 for tweeting it?
The term "native advertising" refers to when an advertiser masks ads as editorial content in an effort to market more seamlessly to consumers. The intent behind this practice is to make advertisements less intrusive and to associate a brand with an experience.… Continue Reading
In a recent interview published by Pharmalot, the Director of the FDA Office of Prescription Drug Promotion (OPDP), Thomas Abrams, indicated that the long-waited draft guidance on the promotion of medical products using the Internet and social media is forthcoming. According to Abrams: "The development and issuance of guidance for social media is among the highest of FDA's priorities."
With other agencies issuing social media guidance over the past year (e.g., FTC, SEC), it is hard not to believe Abrams. However, some skepticism is warranted because the industry has been waiting for FDA's promises about forthcoming Internet-related guidance for almost two decades now...… Continue Reading
As social media has increasingly become intertwined with everyday life, it may be taking a couple steps further – this time in the U.S. courts. In recent weeks, we have seen that U.S. legislators and courts are gaining a greater acceptance towards the use of social media sites like Facebook to effect service of process. … Continue Reading
Yesterday, the Federal Trade Commission (FTC) released updated guidelines (PDF) for regulating unfair and deceptive trade practices in online marketing. The ".Com Disclosures: How to Make Effective Disclosures in Digital Advertising," were released in 2000, before the meteoric rise of social media marketing and the advent of smartphone advertising. As the evolution of these two areas has drastically changed the way brands communicate with consumers and blurred lines between corporate and word of mouth advertising, the FTC saw a need to extend these guidelines to cover all online, social and mobile marketing.… Continue Reading
This week, the Federal Financial Institutions Examination Council ("FFIEC") released its proposed guidance to help financial institutions understand and address the risks associated with social media activities. All banks, savings associations, and credit unions, as well as nonbank entities supervised by the Consumer Financial Protection Bureau and state regulators should review their current and expected … Continue Reading
In line with the NLRB’s attack on other social media policies, the NLRB invalidated the social media and other policies of DISH, holding that employers cannot forbid employees from disparaging their employers.… Continue Reading
Earlier this year, we analyzed some privacy considerations with a class action lawsuit against Facebook accusing the social media giant of violating the rights of users through its "Sponsored Stories" advertising program. Per the Complaint, Facebook would not only display such ads, but would also use the "names, photographs, likenesses, and identities" of Facebook users to help promote the product to friends of those users. The Complaint alleged that a user would be associated with a product by choosing to click a "Like" button, and would then be automatically associated with the corresponding ad campaign, without compensation and allegedly without the user's consent.… Continue Reading
ReACTS is now on Twitter! For those of you who use the service, follow us @ReACTS_AdLaw for regular updates and musings on the world of advertising and marketing and the ensuing legal issues.… Continue Reading
Advertisers are using social media platforms such as Twitter to reach an unprecedented number of people cheaply and instantaneously. With some celebrities enjoying a following of over a million fans, advertisers have found a new way to maximise the traditional celebrity endorsement model and extend the reach and exposure of their promoted goods and services … Continue Reading
An NLRB Administrative Law Judge, following the lead of the NLRB and its recent decision in Costco Wholesale Inc., invalidated the social media and other employment policies of EchoStar Corp. The policies deemed improper prohibited employees, in part, from disparaging a company on social media sites. The ALJ agreed with the NLRB General Counsel's argument that a generic clause in the employee handbook that employees were free to exercise their rights under the National Labor Relations Act was insufficient to bring the rules within compliance with the Act.
Given the Board's decision in Costco and the General Counsel's campaign against such policies, we expect more decisions at both the ALJ and the Board level invalidating employment policies limiting employee speech, regardless of the forum.… Continue Reading
The National Labor Relations Board's recent decision in Costco Wholesale Inc., invalidated certain personnel policies, including social media policies, protecting the dissemination of employee health information and personal identifiers. This case marked the NLRB's first decision involving its independent General Counsel's interpretation of federal labor law as it applies to social media and other personnel policies. The decision (profiled here by Joel Barras) signals the NLRB's agreement with its chief prosecutor's attack on commonly adopted policies regarding, among other things, confidentiality of company information, and follows the series of reports issued by the NLRB General Counsel on social media.… Continue Reading
It’s the latest set-back for social media behemoth, Facebook. After a rocky three months since its IPO where investors have seen shares fall by around 50%, a German advocacy group has accused the social network of violating privacy laws. The Federation of German Consumer Organizations (VZBV) has demanded that Facebook obtain an explicit consent before … Continue Reading