The Legal Side of Social Media for Businesses

Social media is supposed to be the great democratizer — both for people and for businesses. Businesses of any size and level of influence can use it to reach new audiences and earn their loyalty. At the same time, social media isn’t as simple as hitting post on some flashy new content.


There are legal risks and liabilities associated with using social media for advertising purposes. Learning about advertising standards isn’t as exciting as diving into the creative side of digital marketing, but it is equally as important. Fail to toe the line and you could find yourself hauled in front of a regulatory body or wind up in civil court.

As you plan your next social media campaign, you need to do so with knowledge of not only algorithms but also the law. Let’s dive into the most common sticking points for businesses advertising on digital channels.


Follow the FTC Guidelines on Endorsements Every Time

Influencer marketing, sponsorships, and paid posts are all forms of marketing that are both increasingly popular and poorly understood by markets from a legal point of view. On one hand, the point of using these types of marketing is to make your ad campaign look as natural as possible. At the same time, it’s still an ad — and the Federal Trade Commission is cracking down on how you use them. Essentially, you need to ensure that you treat social media ads like any other form of advertising.


The influence of social media personalities, particularly on younger consumers, means that you need to ensure your campaign doesn’t violate competition or consumer protection law. In other words, using #ad or #spon may not cover your back in many cases. Why? Because the FTC’s guidelines also ask that you make sure the relationship between your business and the influencer/blogger is fully disclosed. Failing to do so could mean both you and your marketing partner will find yourself answering to the FTC.


Going by the book can also help you avoid another more recent trend: influencers who fake brand deals to grow their following. FTC rules don’t apply to ‘influencers’ who aren’t compensated and who are promoting your products for free and without your direction. However, creating fully-fledged business relationships with your list of regular promoters can help distance your brand from the #sponcon game if the influencer in question isn’t a fit for your brand — or if they violate other rules themselves. If your brand always discloses partnerships, then those rogue influencers are more likely to stand out to consumers and regulators.


You can read the full FTC guidelines, including the original 2017 documentation, right here. Remember, disclosure isn’t just a hashtag. When, where, and how you disclose a business relationship are just as important.


Sharing Other People’s Content? Share Permissions

Eye-catching imagery is a key ingredient in getting customers to stop and click on your ads. Many businesses choose to share other people’s content in lieu of generating 365-days of original work on their own. It makes strategic sense, and it gives you a chance to engage your followers by sharing tagged posts. The practice is both legal and commonly used, but it’s also where many companies run afoul of the law through breaches of copyright law and fair use guidelines.


Whether you use stock photos, find a nice image on Google Images, or want to regram a customer’s content, you need permission to use them for commercial purposes. In many cases, copyright law requires it. if caught, you could face big legal fees and even bigger fines.


Sharing photos without credit can also damage your online reputation — even if the mistake was seemingly an innocent one. It not only sours your relationship with content creators and makes it more difficult to attract talent, but this kind of ‘content theft’ can go viral. Back in June 2019, singer Miley Cyrus received a huge amount of criticism for allegedly stealing a cake design from a popular baker on Instagram. Cyrus’s team argued that they had only seen the photo as inspiration, but the original creator argued that it was theft.


While the photo was designed to launch Cyrus’s Happy Hippie Foundation partnership with another charity, the story focused on intellectual property theft instead.


Protecting Your Brand from Liability on Social Media

Marketing your business on social media makes you a publisher in the eyes of the law. And that comes with important implications for a company’s liability: if you post something that’s wrongful, defamatory, libelous or something that infringes on intellectual property then your company is liable for it.


Protecting yourself from liability requires more than a ‘do the right thing’ mantra. You need an internal social media policy that double-checks everything you post against a set of internal standards. All businesses should also have valid, legal contracts with any third-party service providers who work on their social media accounts.


One aspect of liability that many don’t consider is the impact of their digital culture on their liability. If you use user-generated content, you need to ensure that you’re not liable for it — whether good or bad. That means not only taking active steps to foster a positive community culture but also regulating it through a legally-binding Terms of Service or Terms and Conditions agreements.


Social Media Marketing Requires You to Play It Safe Online


In so many ways, social media is a way for small companies to live dangerously. You have reach and access that’s simply not possible with offline channels, and if you play your cards right, it’s practically free.


While digital marketers can and should push the boundaries of advertising, it’s important to play it safe when it comes to the legal aspects of social media. Remember that an Instagram post is still advertising, so you need to follow FTC and state guidelines.


While there may be no such thing as bad press, violating the law still comes with a hefty fine. So, calculate your risks accordingly.


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