KEEP YOUR SOCIAL LIFE SAFE
Many companies are tripping over themselves to jump into the world of social networking. The growing popularity of sites such as Facebook, MySpace and Twitter has persuaded companies that they need to get involved in ‘Web 2.0′one way or another. They can do this by creating a profile page, fan page, or by tweeting or blogging.
In a recently published forecast, eMarketer estimated that worldwide marketing spending on Facebook alone would increase by 39 per cent this year (from €320 million in 2009 to €440 million in 2010). International brands such as Starbucks, CocaCola and Nutella are among the 30 most popular Facebook pages at present.
What companies often fail to understand is the wide array of potential legal risks that arise from social media marketing. There have been few court decisions regarding this marketing technique as yet. But it may only be a matter of time before a company faces claims for substantial damages – or even criminal charges – as a result of engaging in social media marketing.
Some of the inherent risks are similar to those that can arise from the use of an ordinary commercial website. But extra care is needed to navigate the myriad regulations which are relevant in the context of social networking.
If a profile page is used to engage in direct marketing activities, the Electronic Privacy Regulations 2003 may apply to unsolicited direct marketing communications sent by the owner.
Failure to comply with these regulations may see the owner found guilty of a criminal offence.
Each communication sent in breach of the regulations constitutes a separate offence, and can result in substantial fines. That fine can be up to €5,000 per offence (on summary conviction) for a company. On indictment, the fine can be the greater of €250,000 or 10 per cent of the company’s turnover.
Processing personal data collected on a profile page must be carried out in accordance with the Data Protection Acts 1988 and 2003.Failure to do so constitutes a breach of these acts and could result in investigations and enforcement actions by the Data Protection Commissioner.
Content on a profile page might infringe the intellectual property rights of another person, and may also be defamatory. Under the new Defamation Act 2009 a competitor company may make a claim for defamation, whereas previously only a natural person could bring a claim for defamation.
Where a profile page includes an interactive area, a visitor could post material that is unlawful, infringes a third party’s rights or is otherwise inappropriate.
There is a risk that the owner of the profile page may be held liable for such material, as statutory protections available to internet service providers under the European Communities (Directive 2000/31/EC) Regulations 2003 (S.I.68 of 2003)may not apply to other businesses.
If content is inaccurate or misleading, a third party who relies on it and suffers loss may be entitled to make a claim for damages against the owner of the profile page.
Likewise, content on a profile page may be used by a third party in a manner which is not acceptable to the profile page owner. For example, artwork or music included on a profile page may be copied or otherwise misused. In the absence of express wording to the contrary, the profile page owner may be considered to have implicitly consented to the use of such materials, and may not have any remedy available to it if they are misused.
Marketing material on a profile page may be subject to advertising standards and codes of conduct.
For example, the Advertising Standards Authority of Ireland’s (ASAI) Code of Standards deals with marketing aimed at children.
Since social networking sites are widely used by children, care should be taken to ensure that marketing material on a profile page complies with the ASAI code.
So how can you insulate your company against these risks?
A website owner should include two separate documents on a website:
(i)Website terms and conditions are intended to exclude or limit the potential liability of the website owner and impose obligations on a visitor to the website.
(ii) A website owner should include a separate privacy policy which informs visitors of the use and disclosures that will be made of their data, and allows them to express their marketing preferences in accordance with the Electronic Privacy Regulations.
A social networking site will have both terms and conditions and a privacy policy. These, however, are drafted by the operator of the site and are intended to protect the operator only. They are unlikely to limit or exclude the liability of an owner of a commercial profile page on the network, or to adderss such a person’s data protection obligations.
For example, in December 2009, Facebook updated its own set of guidelines governing the publicising of any competitions or promotions on Facebook by the ‘owner’ of a page.
This may include advertising a competition through a status update or similar. These guidelines are designed to protect Facebook and do not protect the ‘owner’ of the page who, according to the guidelines, is “fully and solely responsible and liable for. . . [the] promotion’‘.
A number of other practical steps may be taken. For example, a website owner could ensure that, where possible, content posted on the page is properly vetted to prevent defamation and the infringement of third parties’ rights. The risk, however, is that if defamatory or infringing material slips through the net, the owner could be deemed to have knowingly published such material.
As such, a profile page owner may prefer not to vet the content, but to implement robust terms and conditions governing acceptable use of the profile page.
Such terms and conditions could be similar to website terms and conditions, but extra care would be required to ensure that they would be legally binding – while not making the profile page unattractive to visitors.
Adam Finlay is a solicitor with McCann Fitzgerald Solicitors
