This is Part V of a blog series from Davis & Gilbert’s recent report, “Advertising Law: 2013 Lessons Learned & 2014 Practical
Advice,” on the significant changes in the law relating to advertising, marketing and promotions in 2013, and suggestions for advertisers and agencies to think about and address in 2014.
By Joseph J. Lewczak, Gary A. Kibel, Allison Fitzpatrick, Vejay G. Lalla, and Rohini C. Gokhale
Last year proved to be an enlightening year for companies navigating social media. As use of social platforms expanded to engage in storytelling, native advertising, and blogger and consumer endorsements, certain companies faced state and civil actions for their conduct.
In a notable state action, the NY Attorney General concluded an investigation into fake reviews on consumer-review websites, determining that companies used advanced IP spoofing techniques to hide their identities and set up hundreds of false online profiles to post phony reviews. The year-long investigation resulted in settlements with 19 companies and over $350,000 in penalties. Consumer-review websites such as Yelp also demonstrated their willingness to take action against fake reviews by suing several companies that had posted or solicited fake reviews.
Social media platforms themselves were not immune to challenges in 2013. For example, Facebook settled a class action lawsuit for $20 million alleging that the site used users’ profiles in its “Sponsored Stories” advertisements without consent.
One lawsuit in particular highlighted the dangers of using social media content without authorization, when a judge ruled that Getty and Agence France Presse had infringed on Daniel Morel’s copyright by distributing his photos without permission. Morel was awarded $1.2 million in damages. Remember, just because it is available online doesn’t mean it can be used for any purpose.
Acknowledging the challenges that companies face in maintaining a social media presence while complying with regulatory guidelines, the Federal Trade Commission (FTC) published an updated “.com Disclosures” guide to provide guidance on how to make appropriate disclosures online and in mobile.
Looking Ahead to 2014:
Advertisers utilizing social media should take the following steps:
Develop or update written social media policies for bloggers, spokespeople and other endorsers and make sure endorsers are making the appropriate disclosures on social media platforms. Disclosures should be clear and prominent, not buried in hyperlinks or behind buttons. Consider requiring endorsers to have posts pre-approved to verify that required disclosures appear.
Review and update social media policies for recent advertising and employment law developments, including ensuring social media policies only allow “authorized” representatives to post on behalf of the company.
Respect the rights of third parties when posting or otherwise using consumer content via social media platforms or hashtags.
Recognize that commercial uses of social media services and content differ significantly from personal uses.