Social Media Advertising Tools And User Consent: What Are The Requirements?

Perhaps you’ve seen them, those television and radio ads that talk about the “creepy” nature of some adverting on the Internet that follows consumers across their social media. According to Pew Research, most Americans believe their online activities are being tracked and monitored. 

The fact is, most companies can and do share data with social media platforms to ensure targeted advertising reaches receptive audiences. As more tools become available and the variety of data sources grows globally, platforms and advertisers are re-examining their rights and obligations when it comes to something as simple as matching customers’ email addresses with their Facebook accounts. 

Facebook’s Customer List Custom Audiences (“Custom Audiences”) tool is one such tool that has the potential to expand an advertiser’s liability for unauthorized use of customer data. For EU customers, a German Data Protection Authority ruling requires a individual’s explicit consent to such sharing.

The Facebook Custom Audiences tool enables advertisers to create targeted advertisements to Facebook users by combining Facebook data with the advertiser’s data such as email addresses and phone numbers. To use marketing tool the advertiser must comply with the consent and privacy expectations of individuals who have provided email addresses.

Consent to Use Email Addresses

While the use and disclosure of email addresses is regulated in some countries, the U.S. does not have a uniform data privacy protection scheme. U.S. privacy rights are protected through a patchwork of laws addressed to specific types of harm, such as unauthorized access and disclosure of financial (Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681) or healthcare-related (Health Insurance Portability and Accountability Act of 1996 (HIPAA) 42 U.S.C. § 1320d–2) data. While the CAN SPAM Act (15. U.S.C. § 7701 et seq.) specifically regulates email, the Act excludes communications based on a previously existing relationship. 

Importantly, for most purposes, permission of the e-mail recipient is not required. However, messages MUST contain a mechanism to request to opt-out of future email messages. If email addresses are acquired from third-party sources, such as marketing databases or social media, ensure users are given reasonable notice and choice about the use of such data.

The Federal Trade Commission endorses a market-style model of ensuring the fair use of information that allows individuals to participate in decisions on the disclosure and use of their personal information. As articulated by the FTC, the elements of this approach are notice, choice, access, security and enforcement.

Contractual Requirements of Facebook Custom Audiences 

In order to use the Custom Audiences tool, the advertiser must agree to additional terms and conditions. Facebook’s Custom Audiences terms require that the advertiser have both “all necessary rights and permissions” as well as a lawful basis to disclose and use the email addresses “in compliance with all applicable laws, regulations, and industry guidelines.” 

Recommendations

Review your Privacy Policy, Website Terms & Conditions, and membership/subscription applications to confirm the existence of a clear mechanism to opt-out of future email messages. If email addresses are acquired from third-party sources, such as marketing databases or social media, review data gathering practices, review scope of permissions granted to the sources of data and ensure users are given reasonable notice and choice about the use of such data.

What Is Cyberlaw?

On November 13, I had the honor of providing a lecture on Cyberlaw to students at the Boston College Law School. Virtually, of course. I had been asked to talk about trends in Cyberlaw with a specific focus on issues related to intellectual property.

So what is Cyberlaw? Simply put, it is the “Rules of the Road” for the “information superhighway.” Cyber law is the law that governs rights, obligations and remedies of people and transactions conducted over global computer networks.

In a year that has seen hyperbolic growth in technology, commerce, and communications, this topic couldn’t be more timely. In order to frame the discussion, the scope featured a discussion of the Three Cs of Cyberlaw: Connections, Content and Commerce.

The first part of the discussion centered around Content, or issues related to Copyright, such as Free Speech/First Amendment CDA Sec. 230, Creative Works, Media and Entertainment, UGC and the DMCA.

The Second part of the discussion centered around Commerce or issues related to Trademarks, marketing and branding, such as: Marketing/Advertising, Domain NamesCyberpiracy prevention, Keyword Advertising and Social Advertising.

The third and final part of the discussion focused on Connections and Communications and issues related to Personal Data, Stalking, Harassment, Surveillance and Sovereignty, issues around Social Media Freedom of Speech v. Freedom of Reach, and the latest developments around Political speech online.

The lecture closed with a Q&A focused primarily on Navigating Law School and Professional Practice.

Why Now is the Time to Buy or Sell a Business

Looking for Business Opportunities Ahead of the Economic Fallout

In this difficult time of staying at home, people may be looking to buy or sell a business. We have all been impacted in different ways, each of which may be a reason to make a change. Traditional reasons people exit a company arise because of changing economic conditions, a tragic family event, a loss of passion, or simply the desire to retire. At the same time, buyers may be seeking to expand in a sector or industry, add talent, enlarge the customer base, or acquire technologies or resources that can provide a competitive advantage. Witness the unprecedented overnight shift to tele-work, tele-health, remote online primary school education, and live-streamed happy hours and family gatherings.

Thinking of Buying or Selling a Business?

If you are thinking of buying or selling a business, here are three key reasons to act now. First, labor is in flux, and available. As retailers, restaurants, travel companies and other service sectors that employ tens of millions of Americans get squeezed, the tech sector, which tends to have relatively few employees, has surged. Many target businesses may have a lower headcount while retaining a leaner operating infrastructure and access to a ready, willing, and trained talent pool.

Second, the federal government will do what it takes to stabilize the economy and accelerate the recovery. Nevertheless, there is a real risk of many “main-street” companies going bankrupt – making them easy acquisition targets. Opposite that, large-scale public companies (consumer-packaged goods, media) are boosting the broader recovery. Companies on either side of this equation may benefit from the changing market dynamics and opportunities for what comes next. As of this writing, nine states have lifted the stay-at-home orders or will let them expire, with many others soon to follow. The window is closing.

Third, one of few benefits of the current crisis is the acceleration of investment and escalation of consumer-facing products, services, and technologies. Reports indicate that 2020 shows a year-over-year (YoY) increase of over 15% in use of contactless payments.  This is a real opportunity for companies to not only “get lean” but also digitize business practices that can improve the customer experience.

Changing consumer behavior will continue to force this along. According to Forbes, U.S. YoY online retail revenue growth is up 68% in April, surpassing the earlier peak of 49% in early January. U.S. & Canadian e-commerce orders grew 129% with 146% growth in all online retail orders. Online conversion rates increased 8.8% in February, an increase of shopping intensity usually seen only during rare events such as Cyber Monday.

Bottom Line

Most people are sitting around waiting for things to shift and change around them, while others are moving through it all and pivoting on their own. Don’t wait for your competitors to invest in the next generation technologies. Working with experienced legal counsel will help you identify the opportunities and act quickly to negotiate and close a deal. If you are interested in learning more about buying or selling a business, please get in touch.

Choosing the Right Legal Entity for Your Business – Webinar

Seasoned business owners usually know enough to invest in the protection of some form of business entity. Too often, these individuals fail to engage in the necessary business and tax planning to get the most from their investment.
Whether you are a sole proprietor, partnership, corporation, limited liability company (LLC), limited liability partnership, or hybrid entity, you will gain useful knowledge. This webinar covers why a business owner should consider the benefits and costs of each type of entity, the existence of limited liability for owners, flexibility in terms of governance and ownership structure, and favorable treatment under state and Federal income tax laws. More sophisticated entrepreneurs may find certain advantages in terms of estate and gift planning and flexibility in operations and management.
I want to say thanks to the folks at IVY for giving me the opportunity to present the Ivy Webinar – Choosing the Right Legal Entity for Your Business with David M. Adler. In case you missed it, there is a link to the full webinar details below.
NOTICE AND DISCLAIMER: The webinar content is for informational purposes only. It is not legal advice and does not create a lawyer-client relationship with David M. Adler.
View Webinar Here.

Declaratory Judgment Action for Copyright Infringement

At a time when #media creation & consumption is traveling across a growing number of devices, at increasing speeds, and without care for for borders whether physical, digital, or geographic, licensing, distribution and use of digital content can cause problems.

The case of Fastcase, Inc. v. Lawriter, LLC, Case No. 17-14110 (11th Cir. Oct. 29, 2018) (Tjoflat, J), involved a dispute between two legal publication service companies over the right to re-publish the Georgia Regulations.

The Declaratory Judgment defendant and presumptive rights owner had no enforceable copyright or contract rights in the Regulations. Defendant updated the terms so that unauthorized re-publication of the Regulations would result in liquidated damages of $20,000 per instance, which was relevant to the jurisdictional issues of whether § 411(a) is a jurisdictional bar.

From The National Law Review, source for this story: “Practice Note: A demand letter alleging infringement under the Copyright Act—or even alleging state law claims that would arguably be preempted by the Copyright Act—confers jurisdiction on a federal court to hear the recipient’s declaratory judgment action.”

Illinois law and enforceability of postemployment restrictive covenants

Every business in this, the Information Age, is highly dependent on confidential and proprietary information.  As many design and creative professionals know, a design business is often based on intimate, personal relationships with clients. As a result,  relationships are built upon a high degree of trust and the professional reputation of the designer.  In addition, the designer brings a host of regular vendors and proprietary skills, knowledge, experience, including private and confidential information about clients, used for operating the Business.  It is not surprising that businesses will seek to prevent disclosure of business, technical and financial information (including information relating to clients, employees and vendors, as well information an employee learns during her employment.

Do I need a Non-solicitation agreement for my Design Business?

Increasingly, I am being asked by clients to prevent departing employees from using proprietary and confidential information and form poaching clients and employees.  These non-disclosure or non-solicitation provisions seek to prevent an employee from encouraging or soliciting any client, employee, vendor, or contractor to leave. Unfortunately,

Restrictive Covenants Are Hard to Enforce!

Post-employment restrictive covenants are carefully scrutinized by Illinois courts because they operate as partial restrictions on trade. Fifieldv. Premier Dealer Services, Inc., 2013 IL App (1st) 993 N.E.2d 938 (citing Cambridge Engineering, Inc. v. Mercury Partners90 BI, Inc., 378 Ill.App.3d 437, 447 (2007) ). In order for a restrictive covenant to be valid and enforceable, the terms of the covenant must be reasonable. It is established in Illinois that a restrictive covenant is reasonable only if the covenant (1) is no greater than is required for the protection of a legitimate business interest of the employer, (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. Reliable Fire Equipment Co. v. Arredondo, 965 N.E.2d 393 (2011). The courts consider the unique factors and circumstances of the case when determining the reasonableness of a restrictive covenant. Millard Maintenance Service Co. v. Bernero, 566 N.E.2d 379 (1990). However, before even considering whether a restrictive covenant is reasonable, the court must make two determinations: (1) whether the restrictive covenant is ancillary to a valid contract; and (2) whether the restrictive covenant is supported by adequate consideration. Fifield, 993 N.E.2d 938. Absent adequate consideration, a covenant, though otherwise reasonable, is not enforceable. Id. ¶ 14 (citing Brown & Brown, Inc. v. Mudron, 887 N.E.2d 437 (2008) ); see also Millard, 566 N.E.2d 379.

For most businesses, enforceability of such covenants turns on the concept of “consideration.” The current Illinois authority on “consideration” is Fifieldv. Premier Dealer Services, Inc., 2013 IL App (1st) 120327. In Fifield, the Illinois appellate court noted that Illinois courts have repeatedly held that there must be at least two years or more of continued employment to constitute “adequate consideration” in support of a restrictive covenant.  The court also clarified the process by adding that “Fifield [did not overrule or modify] Brown, which engaged in a fact-specific approach in determining consideration.

As a general rule, courts do not inquire into the adequacy of consideration. However, postemployment restrictive covenants are excepted from this general rule because “a promise of continued employment may be an illusory benefit where the employment is at-will.”  Most design businesses have at-will employees.

Fifield is equally important for both what it says and for what it does not. Clearly employment alone – any less than two years duration – is  NOT adequate consideration. However, the Fifieldcourt also stated that there could be other or additional factors such as an “added bonus in exchange for this restrictive covenant, more sick days, some incentives, [or] some kind of newfangled compensation,” that could be considered additional compensation that could support enforcement of the covenant.

Despite the recognition that the bar is set high for the amount of consideration necessary to enforce restrictive covenants, it makes sense to include them in your agreements with those who work for you.

In addition to the non-solicitation language, one should create a strong and broad definition of protectable proprietary and confidential information.  While it may not always be possible to stop a former employee from directly competing against you, it is possible to prevent said employee from using your own proprietary and confidential information against you.

 

Technology, Innovation and the Law

In today’s world, business is no longer about simply having an online presence. Digital business is transactional and social across platforms and networks across thew globe. The previous model of one-to-one transactional business relationships has evolved to one that is reciprocal, collaborative and highly interactive.

This new level of engagement is not without risks. As businesses expand into new online areas for marketing and commerce, businesses should be aware of a myriad of laws and risk areas implicated when one conducts business online. Business lawyers must be familiar with Technology Law.

There are a wide variety of services around the most common types of content and businesses need legal disclaimers, protection of intellectual property rights and other ways to limit liability.

Generally, the key areas and issues are:

Trade & Commerce Issues

  • Advertising & Promotions Laws (these vary by state)
  • Affiliate Marketing Agreements/Relationships
  • Federal Regulatory Guidelines
  • Industry Regulations & Guidelines
  • CAN-SPAM Act
  • Online Contracts/Terms of Use (Click-Wrap/Browse-Wrap Agreements)
  • Disclaimers
  • Limits of Liability
  • Sales & Taxation/Clarifying Nexus Confusion
  • Choice of Law/Forum
  • Insurance Law
  • Website Representations and Warranties

Intellectual Property Issues

  • Copyright & Digital Millennium Copyright Act
  • Defamation/Free Speech
  • Trademark Law
  • Unfair Internet Business Practices Such as Domain Name Hijacking & Cybersquatting
  • Anti-cybersquatting Consumer Protection Act
  • Linking/Scraping/Crawling
  • Patent Law
  • Licensing
  • Trade Secrets

Privacy & Security Issues

  • Credit Cards / Transaction Processing
  • E-Payment and Credit Card Security/Privacy
  • Children’s Online Privacy Protection Act
  • Data Breach Notification Laws
  • Data Privacy Laws

Human Resources & Employment Issues

  • BYOD & Computer Usage Guidelines for Employees
  • Employment and Labor Laws
  • Social Media Guidelines for Employees

We look forward to the opportunity to discuss any questions you may have regarding the range of business, technology and intellectual property services we offer. Our law office is based in Chicago, Illinois. Please feel free to call us at (866) 734-2568 should you have any questions.

Advanced Issues in Contracts for Interior Designers

Every business transaction is governed by contract law, even if the parties don’t realize it. Despite the overwhelming role it plays in our lives, contract law can be incredibly difficult to understand.

Successful Interior Designers know how to manage the legal needs of the business while bringing a creative vision to life for a client or project. Confusion about rights, obligations, and remedies when things go wrong can strain and even ruin an otherwise promising professional relationship.

This program teaches new designers and entrepreneurs answers to some basic questions, such as:

  • What to do when clients / vendors / contractors don’t pay?
  • How can one use Indemnifications, Disclaimers and Limitations of Liability clauses to balance business risk when the parties may not be economically balanced?
  • What types of remedies are available and what are the limitations in scope for certain types of monetary and “equitable” remedies?

Take a deeper dive into advanced issues for interior design professionals. Learn how contracts can protect your design business and how to safeguard your rights.

Qualifies for .1 CEU credit.

This program was originally delivered on Aug. 17, 2017 at the Design Center at theMART 14th Floor Conference Center, 222 Merchandise Mart Plaza, Chicago, IL 60654

Contract Basics for Interior Designers

Ever had an Interior Design client refuse to pay, not give you credit for your work, or use your design without actually hiring you? As unfair as these situations sound, the truth is they happen often. Poor planning, client management or incomplete contracts account for most of these situations. Get expert legal advice from a Chicago-based lawyer who understands the ins and outs of the design industry and learn how to address some of the biggest risk factors designers face today and how your contract can (and more importantly, should) protect you. Follow the link for access to the free informational prevention about improving your interior design contracts.

presentation-contract-basics-for-interior-designers

You’re Invited to LAUNCH: Client Contracts 2.0

Contracts

DATE: Wednesday, June 29
TIME: 9:30AM to 11:30AM
LOCATION: New York Design Center, Conference Room
ADDRESS: 200 Lexington Avenue, NYC

Have you ever had a client refuse to pay a bill, not give you credit for your work, or use your design scheme without hiring you? As loathsome as these situations sound, the reality is that they happen more often than we like to admit. The best way to avoid these issues is to arm yourself with an airtight contract. For this task, we’ve enlisted David Adler, a Chicago-based lawyer who understands the ins and outs of the design industry, to serve as your legal expert for the morning. He will address some of the biggest risk factors interior designers face today and how your contract can (and more importantly, should) cover you. You’ll leave with a better understanding of how you can tighten up your existing contract so you don’t have to learn the hard way.

Register for the event here.