Social Media World Legal News Roundup

The Government Would Like You to Write a ‘Social Media Will’
The Atlantic

This person will be responsible for closing your email addresses, social media profiles, and blogs after you are deceased. Sounds good, but legally it’s tricky territory.

Rights Groups: Asian Media Freedoms Under Fire
Voice of America

SEAPA says the key trend is that governments are shifting focus from traditional broadcast and print media to social media and online news. SEAPA Executive Director Gayathry Venkiteswaran said online news sites have become the most frequent target.

Liberia: Will Social Media Increase Civic Engagement?
Global Voices Online

CT: The growing usage of the internet and social media in Liberia is certainly a progressive trend. Having worked in Liberia, can you briefly tell us how the internet and social media are viewed by the cross sections of the Liberia population?

Global Voices Online MyCorporation Introduces New Social Media Product
Sacramento Bee

By MyCorporation CALABASAS, Calif., May 3, 2012 — /PRNewswire/ — Calabasas-based company MyCorporation is releasing a new social media product to benefit small businesses, MyCorpSocial.

Students’ racist tweets about Boston hockey game put schools in a bind
msnbc.com (blog)

Hordes of angry hockey fans – presumably Boston Bruins fans — unleashed a barrage of racist rants on Twitter and other social-networking sites after the Washington Capitals beat the defending champion Bruins a week ago Wednesday on an overtime goal.

Keep it private – your Facebook password should not be shared: Commissioner …
Canada NewsWire (press release)

Some of the issues covered in depth in the paper include: Build up a positive online social media profile. “It is absolutely crucial to remember that anything you post online may stay there forever, in one form or another, so think carefully.

Canadians encouraged to plan for online estates
CBC.ca
(CBC)

Canadian consumers are being encouraged to consider their online property, including social media accounts, when planning a will. A new report released earlier this week by the BMO Retirement Institute raises concerns.

SNOPA
Continued concern about employers asking applicants and employees for their passwords to social media sites has led to the introduction of a federal bill.

Social Media World Legal News Roundup

The legal and regulatory environment impacting social media is constantly evolving. Here is a collection of recent articles impacting everything from law enforcement use of social media to new legislation.

A social media tip line for police
Boston.com
“Use of social media has provided an additional outlet for people to interact with law enforcement” says Lauri Stevens – founder of LAwS Communications, a consulting company that helps law enforcement agencies expand into social media.

Social media limits and the law
Monterey County Herald
Leland Yee, a San Francisco Democrat, introduced a bill that would prohibit employers, public or private, from requiring or requesting in writing a prospective employee to disclose user names or passwords for personal social media accounts.

Ariz. bill says unlawful to ‘annoy’ others online
BusinessWeek
“Speaking to annoy or offend is not a crime,” Media Coalition Executive Director David Horowitz said. Horowitz said if the proposal becomes law, speech done in satire, political debate or even sports trash talking could get people in unnecessary legal trouble.

Social Media in China, Innovation
Washington Post
Apr. 2, 2012 – April 2 (Bloomberg) — Vivek Wadhwa, fellow at Stanford Law School and head of academics at Singularity University, talks about social media in China and innovation.

UAE legal experts want libel to apply to social networking sites
GMA News
Claiming that Facebook, Twitter and other social networking sites can be used to spread rumors and false information, the legal community in the United Arab Emirates (UAE) is seeking that libel laws be applied to offenders on the Internet.

Is Your Facebook Password Like Your Mail, House Key, or Drug Test?
The Atlantic
A day after it was proposed, the amendment was voted down — almost entirely along party lines — thus closing one door to social media privacy legislation, at least on the national level. (There are similar social media privacy laws — full bills, …

Sponsor: Arizona bill isn’t aimed at Internet trolls
CNN
The fear is that the bill would prohibit hateful comments on news and social-media sites, amounting to a ban on so-called Internet trolling. The problem: The bill won’t do any of that, its sponsor told CNN on Wednesday. “I think they’re absolutely …

How Family Law Attorneys Use Social Media Evidence [Infographic]
PR Web (press release)
Family Law Attorneys Dishon & Block formally released today an infographic that illustrates how attorneys use social media to collect “smoking gun” evidence for divorce and child custody cases. With the advancement in technology and modernizing of laws …
See all stories on this topic »
PR Web (press release)

FTC Releases Final Report With Privacy Recommendations

  • Calls for voluntary online Do Not Track system
  • Calls on Congress to pass general privacy legislation
  • White House has called for privacy bill of rights

In 2011, the Federal Trade Commission slapped Google and Facebook for violating their own privacy policies, forcing both to submit to years of privacy audits. In February, 2012 , the Obama administration issued a blueprint for a “Consumer Privacy Bill of Rights.” The FTC, the main government agency responsible for protecting privacy, called Monday for legislation that would give consumers access to information collected about them by data brokers similar to the rights they now have to review information amassed by credit reporting agencies.

The FTC’s report comes a little over a month after the White House released its privacy bill of rights that called on companies to be more transparent about privacy and grant consumers greater access to their data but that stopped short of backing an explicit “do not track” rule. The Federal Trade Commission’s 57-page privacy report consisted of a set of “best practices” that the Internet industry is expected to follow — or face sanctions. The report mirrors many of the provisions of the “Consumer Privacy Bill of Rights” released by the White House and represents the first serious efforts at striking a balance in online consumer privacy protection related to web usage.

Critics contend the framework is not as extensive as the White House Consumer Privacy Bill of Rights announced back in February. That already made provision for “Do Not Track” technology, with Google, Yahoo!, Microsoft and AOL – together responsible for almost 90-percent of behavioral advertising – already opting in. Privacy advocates have slammed the new” guidelines, arguing that the proposed system for ensuring online data security fails to take advantage of existing authority and relies too much on self-regulation of the online industry. The new framework “mistakenly endorses self-regulation and ‘notice and choice,’” the Electronic Privacy Information Center claims, ”and fails to explain why it has not used its current Section 5 authority to better safeguard the interests of consumers.”

Five Social Media Legal Mistakes That Your Business Is Making

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Seemingly overnight, Social media has moved from a business curiosity to an invaluable tool for customer engagement, brand positioning and employee empowerment. For example, social media use for 18-29 year olds has grown from 16% in 2005 to 89% in 2010. A recent survey, now in its third year, found that Social Media is imperative and effective to stand out in a crowded market: 88% of all marketers found that it helped increase exposure and 76% found that it increased traffic and subscriptions.

Faced with the rapid adoption of social media services and platforms, companies find themselves in a dilemma: move quickly to adapt to new technologies, or put policies in place that support marketing goals. Finding the right balance between taking appropriate business risks and minimizing legal ones is a dilemma shared by all businesses, and it can be particularly tricky in the rapidly changing realm of social media. A social media snafu could pull a business into a range of legal imbroglios, involving employment law, intellectual property rights, advertising, defamation, libel, antitrust, and privacy protection.  What follows is a list of five common social media legal mistakes that businesses are making.

1. Your Company does not have a social media policy.

Social media is going through an evolution from social media to social business. Yet In the rush to avoid being left behind, some 79% of companies do not have social media policies in place. Companies and employees are becoming deep users of Twitter, LinkedIn, Facebook, blogs, private-label platforms, and the like. Absence of a policy has led to lawsuits over basic issues such as ownership of LinkedIn profiles and Twitter followers. Lack of a policy could also lead to awkward situations that require a response, but may not rise to the level of a legal quandary such as public criticism by a volunteer or advisor.

Having a social media policy cannot prevent the occurrence of unintended consequences. However, it can address most risks that businesses will face and provide an informal framework for addressing issues that will inevitably arise before they become full-fledged emergencies that require a legal solution.

2. Your Company’s social media policy is unenforceable.

Not surprisingly, one of the most active legal areas of social media for business has been in the context of Employer-Employee relations. In 2011, the U.S. Chamber of Commerce released a report stating that the National Labor Relations Board (NLRB) had received 129 cases involving social media. The majority of claims concerned overly-restrictive employer social media policies or employee discipline and even termination based on use of social media.

More recently, the NLRB released updated guidance discussing 14 such cases in particular. Significantly, the NLRB criticized five employers’ social media policies, as  “unlawfully overly broad” (e.g., too restrictive). In four cases, an employee’s use of Facebook to complain about their employer was held to be “protected concerted activity.” The benefit for employers is that the report frames the discussion for the appropriate scope of an enforceable social media policy.

3. Your employees don’t understand your social media policy.

For companies who have drafted a social media policy, another risk is that the employees who are engaged in social media on behalf of the company or brand do not understand the policies. Training employees about what it is, how it works and what’s expected is just the beginning.

For example, Australian telecomm company Telstra is an excellent example of social media transparency. This 40,000+ employee company mandates social media training built around a manageable policy focused on “3Rs” – responsibility, respect and representation. To promote awareness and understanding, the comic book-styled policy answers simple questions like “what is Facebook?” and more complex issues like employer criticism on personal blogs. Taking it a step further, the company published their entire social media training guide online for others to study and critique.

4. Your privacy policy is out of date.

Back in the early days of the Internet “Gold Rush,” companies raced to create an online presence complete with ecommerce storefronts. Partly due to the length of time it took to get a web site up and partly due to the fear of risks associated with ecommerce, companies made sure to implement comprehensive Terms of Use and Privacy Policies. Many have not revisited those policies since.

The risks of an outdated privacy policy are twofold. First, it may be unenforceable for any number of reasons. For example, the company has changed the way it gathers and stores information about site visitors, has changed the platforms from which it gathers such data and potentially with whom it shares such data, even unwittingly.

More importantly, the dynamics of online usage and marketing have changed. The availability of GPS data and commonly used technologies for targeted advertising and related services pose new privacy risks such as leaking personally identifiable information including usernames, email addresses, first names, last names, physical addresses, phone numbers, and birthdays. A recent series of articles by the Wall Street Journal analyzed the tracking files installed on people’s computers by the 50 most popular U.S. websites, plus WSJ.com and found that some sites like dictionary.com had over 200 such tracking cookies.

Second, an outdated privacy policy may subject a business to scrutiny and even penalties from the Federal Trade Commission (FTC). On October 12, 2011 the FTC announced a settlement with a file-sharing application developer over allegations that it used deceptive default privacy settings, which would lead consumers to unintentionally and unknowingly share personal files from their mobile device or computer with the public.

5. Your Company is Not Engaging In The Conversation.

Lastly, social media enables instantaneous, ubiquitous, electronic social interaction using highly accessible and scalable publishing techniques. The platforms and services that enable this interaction also provide an unfettered medium for defamatory statements about individuals, disparaging remarks about a companies’ products and services and inaccurate or misleading remarks by over-enthusiastic employees.

The legal risk is that a company often does not control such conversations which can quickly spiral out of control. Many web sites and blogs allow comments and invite participation by unrelated third parties. Having a strategy for when, how, and why to engage is critical to mitigate the legal risks since this area of law is notoriously fact and circumstances dependent and varies by jurisdiction.

Contact Us For a Consultation.

Is your business making one of the mistakes described above? Do you want to learn how to use social media to market and communicate with existing and prospective clients and do so in a way that minimizes potential risks and pitfalls? Hopefully, the guidance outlined above can serve as a good starting point for discussions about how best to use social media as well as suggestions regarding factors that firms may wish to consider in strengthening their compliance and risk management programs. We invite you to contact us with comments and requests about how we can help you educate your employees, prevent fraud, monitor risk, and promote compliance. We can be reached at lsglegal.com, 866-734-256, @adlerlaw and dadler@lsglegal.com.

RSA 2012 Conference Podcast: Social Media Legal & Regulatory Compliance

The past few years have witnessed an explosion of legal and regulatory activity involving social and other new media. This session will examine several key areas, including copyright, trademark and related intellectual property concerns; defamation, obscenity and related liability; false advertising and marketing restrictions; gaming; data privacy issues presented by social media; and impacts of social media on employees and the workplace. Attendees will learn how to identify legal risks and issues before they become full-scale emergencies and how to develop appropriate policies and guidelines covering social media activity.

The RSA® Conference 2012 is coming up: February 27 – March 2, 2012 at the Moscone cEnter in San Francisco, CA.

Can’t make the Conference? Listen to the podcast here to get a sense of what you need to know.

Regulated Industries – Social Media Legal & Regulatory Compliance

Seal of the United States Federal Trade Commis...
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For the past year and a half, I have been traveling to various conferences around the country to speak on Legal and Regulatory compliance in social media. In the beginning, case law and regulatory guidance was scarce and little information was available to provide businesses engaged in social media with a roadmap for Social Media Legal and Regulatory compliance. However, a lot has changed over the last year and a clear trend is emerging. Industry regulators are aware of the use – and abuse – of social media by their members. This article examines recent guidance provided by the Federal Trade Commission (FTC), the Food & Drug Administration (FDA), the National Labor Relations Board (NLRB), the Financial Industry Regulatory Authority (FINRA) and the Securities Exchange Commission (SEC).

Social Media in Marketing, Advertising & Commerce.

The FTC has a prime directive to protect consumers. In the social media sphere, the FTC has pursued this mandate by enforcing companies’ Terms of Use and privacy policies. In addition, the FTC has recently issued updated guidance for companies and individuals that review, promote, advertise or otherwise write about various products and services. In 2009, the FTC tackled its first social media case, an investigation involving Twitter. The focus of the FTC action was Twitter’s privacy policy that asserted A concern about safeguarding confidentiality of personally identifiable information and privacy settings designed to designate tweets as private.

The settlement, first announced in June 2010, resolved charges that Twitter deceived consumers and put their privacy at risk by failing to safeguard their personal information. Lapses in the Twitter’s data security allowed hackers to obtain unauthorized administrative control of Twitter, including both access to non-public user information and tweets that consumers had designated as private, and the ability to send out phony tweets from any account. Under the terms of the settlement, Twitter has hit ended and ongoing obligations concerning consumers and the extent to which it protects the security, privacy, and confidentiality of nonpublic consumer information, including the measures it takes to prevent unauthorized access to nonpublic information and honor the privacy choices made by consumers.

In a similar action, the FTC settled and investigation into Facebook,the leading social media platform/service. The social networking service agreed to settle Federal Trade Commission charges that it deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public. The settlement requires Facebook to take several steps to make sure it lives up to its promises in the future, including giving consumers clear and prominent notice and obtaining consumers’ express consent before their information is shared beyond the privacy settings they have established.

Read the FTC update here.

As recently as January 10, 2012, the FTC reached a settlement with UPromise, Inc., stemming from charges that the company – a membership reward service – allegedly used a web-browser toolbar to collect consumers’ personal information, without adequately disclosing the extent of personal information collected. The FTC found that the toolbar was collecting the names of all websites visited by its users as well as information entered into web pages by those users, including user names, passwords, credit card numbers, social security numbers and other financial and/or sensitive data. Furthermore, this data was transmitted in unencrypted, clear text that could be intercepted or viewed by third parties in a WiFi environment. The result? UPromise had to destroy all data it collected under the “Personalized Offers” feature of its “TurboSaver” toolbar in addition to other obligations related to data collection practices and consent to collection of personal information.

Other Industry Guidance.

In October 2009, the Federal Trade Commission released it’s updated “FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising.” The updated Guides contain two notable areas of concern for marketers. First, the Guides removed the safe harbor for advertisements featuring a consumer’s experience with a product or service, the so-called “results not typical” disclosure. Second, the FTC Guides underscored the longstanding principle of disclosing “material connections” between advertisers and the consumers, experts, organizations, and celebrities providing reviews and endorsements of products and services.

For concise guidance on when, how and what to disclose, see my article here.

Social Media in the Healthcare & Pharmaceutical Industries.

Like other consumer-oriented industries, Pharmaceutical and Biotech firms are rapidly expanding their presence online. This growth over the past several years has not gone unnoticed as evidenced by FDA Warning Letters targeting marketing campaigns “broadcast” via websites and social media platforms. The FDA also provides more general guidance for the industry. Policy and guidance development for promotion of FDA-regulated medical products using the Internet and social media tools are available in the FDA’s Consumer-Directed Broadcast Advertisements Questions and Answers. While this document provides clear direction for traditional media broadcasting , it only skims the surface regarding web content.

Social Media in the Workplace.

Probably no other federal agency has been as active as the NLRB in recent months. The NLRB has a mandate to protect employees rights to organize and discuss working conditions without fear of reprisals from employers. On August 8, 2011, the Associate General Counsel for the NLRB released a memo entitled “Report of the Acting General Counsel Concerning Social Media Cases.The report began by analyzing a case of first impression: whether an Employer unlawfully discharged five employees who had posted comments on Facebook relating to allegations of poor job performance previously expressed by one of their coworkers.

On January 25, 2012, the NLRB released a second report describing social media cases handled by the NLRB. The “Operations Management Memo” available here, covers 14 cases, half of which involve questions about employer social media policies. Five of those policies were found to be unlawfully broad, one was lawful, and one was found to be lawful after it was revised.

The remaining cases involved discharges of employees after they posted comments to Facebook. Several discharges were found to be unlawful because they flowed from unlawful policies. But in one case, the discharge was upheld despite an unlawful policy because the employee’s posting was not work-related. The report underscores two main points made in an earlier compilation of cases: 1) policies should not sweep so broadly that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees; and 2) an employee’s comments on social media are generally not protected if they are mere gripes not made in relation to group activity among employees.

Social Media and the Financial Services Industry.

From the Madoff scandal, to the Occupy Wall Street Movement, to Mitt Romney’s tax returns, the financial services sector is accustomed to the scrutiny and ire of the public and government regulators. Therefore it is no surprise that on January 4, 2012, the SEC’s Office of Compliance Inspections and Examinations, in coordination with other SEC staff, including in the Division of Enforcement’s Asset Management Unit and the Division of Investment Management, issued its “Investment Adviser Use of Social Media” paper. The paper begins by observing that although “many firms have policies and procedures within their compliance programs” governing use of social media” there is wide “variation in the form and substance of the policies and procedures.” The staff noted that many firms have multiple overlapping procedures that apply to advertisements, client communications or electronic communications generally, which may or may not specifically include social media use. Such lack of specificity may cause confusion as to what procedures or standards apply to social media use.

The SEC paper suggests that the following factors are relevant to determining the effectiveness of a Social Media compliance program:

  • Usage Guidelines
  • Content Standards
  • Monitoring
  • Frequency of Monitoring
  • Approval of Content
  • Firm Resources
  • Criteria for Approving Participation
  • Training
  • Certification
  • Functionality of web sites and updates thereto
  • Personal/Professional sites
  • Information security
  • Enterprise-wide web site content cross collateralization

Similarly, the Financial Industry Regulatory Authority (FINRA) has issued guidance for secutires brokerage firms. According to its web site, FINRA “is the largest independent regulator for all securities firms doing business in the United States.” FINRA protects American investors by ensuring fairness and honesty in the securities industry. In January 2010, FINRA issued Regulatory Notice 10-06, providing guidance on the application of FINRA rules governing communications with the public to social media sites and reminding firms of the recordkeeping, suitability, supervision and content requirements for such communications. Since its publication, firms have raised additional questions regarding the application of the rules. Key take aways from FINRA’s guidance include the flowing:

  • Brokerages have supervisory and record keeping obligations based on the content of the communications – whether it is business related – and not the media
  • Broker-dealers must track and supervise messages that deal with business
  • Firms must have systems in place to supervise and retain interactions with customers, if they are made through personal mobile devices
  • A broker must get approval from the firm if she mentions her employer on a social media site
  • Pre-approval for instant messages, also known as “unscripted interactions’ in legalese, is not necessary as long as supervisors are informed after the fact

Conclusion.

Many professionals in regulated industries are eager to leverage social media to market and communicate with existing and prospective clients and to increase their visibility. However, participants must ensure compliance with all of the regulatory requirements and awareness of the risks associated with using various forms of social media. Hopefully, the guidance outlined above can serve as a good starting point for discussions about how best to use of social media as well as suggestions regarding factors that firms may wish to consider is helpful to firms in strengthening their compliance and risk management programs. We invite you to contact us with comments and requests about how we can help you educate your employees, prevent fraud, monitor risk, and promote compliance. We can be reached at lsglegal.com866-734-256, @adlerlaw and dadler@lsglegal.com.

Social Media Legal Risks: Seven Ways to Maintain Social Media Marketing Legal Compliance

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In October 2009, the Federal Trade Commission released it’s updated “FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising.” The purpose of the update was to address the increasing use of endorsements by consumers, experts, organizations and celebrities in online marketing. The update is particularly relevant to the explosive growth of social media as a marketing tool.

The updated FTC Guides contain two notable areas of concern for marketers. First, the Guides removed the safe harbor for advertisements featuring a consumer’s experience with a product or service, the so-called “results not typical” disclosure. Second, the FTC Guides underscored the longstanding principle of disclosing “material connections” between advertisers and the consumers, experts, organizations, and celebrities providing reviews and endorsements of products and services.

Even with the illustrations provided within the FTC Guides themselves, it is still confusing for advertisers, marketers, bloggers and social media users to know how to comply with the guidelines. The purpose of this article is to provided simple, concrete standards to determine (1) when to make certain disclosures and (2) the type of disclosures required by the situation. I have grouped the disclosures into seven categories: Personal Opinion, Free Samples & Free Gifts, Promotional Relationship, Employment Relationship, Affiliate Relationship, Healthcare Disclosures, and Financial Guidelines & Disclosures. The key requirement to keep in mind is the obligation to disclose any relationship that may have influenced you.

1. Personal Opinion

If you write a review or blog post and your post contains only your own opinions, you haven’t received any compensation for the review or post, and you otherwise have no material connection to the topic of your post, you have nothing to disclose.

2. Free Sample/Free Gift

If you have been given a free copy, sample, or gift of a product or service and you write a review or blog post, you must disclose the facts and circumstances of how you received the item or service, even if you have not been paid to review or post on that topic. You do not run afoul of the disclosure rules if you receive payment unrelated your content. This disclosure is useful to keep in mind when your content relates to product previews, reviews of samples, services, gifts, books, software, music, movies, etc.

3. Promotional Relationships

If you write a review or blog post and your post is based upon an advertising relationship, and you have received compensation (cash, free services, product samples for personal use or a gift) for the review or post, you must disclose the nature of the relationship, whether you received anything of value, and information about relationships with advertisers or endorsers that would have a material impact about how a prospective consumer would view the message. This disclosure is useful to keep in mind when your content relates to paid posts, sponsored messages, tweets, fan page postings, etc.

4. Employment Relationships

If you write a review or blog post and your post is based upon an employment relationship, e.g. you are an employee or shareholder of a related company, you have a “material business relationship” to disclose, even if you are not being directly compensated for the message. You may post on behalf of a business or brand. In fact, it may even be part of your job description. Again, be mindful of the requirement to disclose any “connections” that may have influenced you, including both direct and indirect relationships.

5. Affiliate Relationships

If you write a review or blog post and your post is based upon an affiliate relationship, e.g., you have included affiliate links on your page, you must disclose the fact that the relationship exists and that you will be paid for referrals from your page.

6. Healthcare Disclosures

If you write a review or blog post and your content is based upon a connection to a pharmaceutical or healthcare product or program, you need to include relevant healthcare-related disclosures or information safety warnings, side effects, or official links with information.

7. Financial Guidelines & Disclosures

If you write a review or blog post and you work for a financial services company, you may be making investor-relations communications and your communications are subject to regulation by the NASD, SEC, FINRA and potentially state and federal regulatory agencies. The FINRA Guidance on Blogs & Social Networking Sites” can be found here. Record Retention: ensure that you can retain records of those communications. Suitability: a particular communication a “recommendation” for purposes of NASD Rule 2310 and is it suitable for potential recipients. Public Appearances: determine whether  your post part of an “interactive online forum” and whether supervision is required. Third-Party Posts: If your firm created or “sponsors” and online forum, be aware that, under certain circumstances, a customer’s or other third party’s content on a social media site may become attributable to the firm. Whether third-party content is attributable to a firm depends on whether the firm has (1) involved itself in the preparation of the content or (2) explicitly or implicitly endorsed or approved the content.

Clearly, legal and regulatory compliance for social media remains a minefield. Although this article is intended to give you a working knowledge of the types of risks created by, and disclosures required for, the use of Social Media, it is NOT LEGAL ADVICE. Each situation is unique and you should consult with qualified legal counsel regarding your specific circumstances.

ABOUT THE AUTHOR

David M. Adler, Esq. is an attorney, author, educator, entrepreneur and partner at the boutique intellectual property, entertainment & media law firm LEAVENS, STRAND, GLOVER & ADLER, LLC based in Chicago, Illinois. My responsibilities include providing advice to business units and executives on copyright, trademark, ecommerce, software/IT, media & entertainment and issues associated with creating and commercializing innovations and creative content, drafting and negotiating contracts and licenses, advising on securities laws and corporate governance and managing outside counsel. Learn more about me here: www.ecommerceattorney.com and here: Leavens Strand Glover & Adler, LLC.

Consumer Watchdog Asks FTC to Stop Facebook Virtual Currency

Social gaming, and the market in virtual goods they support is serious business. According to some estimates, sales of virtual goods may be as large as $2.1 billion in 2011. Facebook has recently announced a requirement that Social gaming developers such as Zynga, famous for its “Farmville” game among others, that use the Facebook platform must exclusively use Facebook Credits in the operation of their games.

With over 500 million users worldwide, and a substantial portion of them in the United States, Facebook may well control over 50% of the market for virtual goods offered in social gaming. Scheduled to take effect on Friday, July 1, 2011, in addition tot the exclusivity requirement, the Facebook Credits terms mandate that developers agree not to charge lower prices to consumers outside of Facebook and pay a 30% service fee for all Facebook Credits purchases.

Critics see the risks as two-fold. First, combining its dominance as the leading platform for social gaming with control of virtual commerce may stifle innovation and competition. Second, Facebook is expected to offer streaming media, music, and potentially real-world, non-digital goods for purchase with Facebook Credits as the applications become more diverse on the social network.

In a complaint, the nonprofit, nonpartisan public interest group Citizen Watchdog asks the FTC to issue an injunction that would stop the anticompetitive behavior.

Read the complaint here: http://www.consumerwatchdog.org/resources/cwd_ftc_facebook_credits_complaint-3.pdf

————–
David M. Adler, Esq. is an attorney, author, educator and entrepreneur with a multidisciplinary practice focused on Intellectual Property, Media & Entertainment Law, Ecommerce, Information Technology and Software development, implementation and licensing. Mr. Adler provides legal counsel all aspects of media and intellectual property law, including trademark and copyright clearance, registration and enforcement, digital and new media licensing, production, finance, regulations, litigation and corporate-commercial transactions. Mr. Adler assists interactive and digital marketing and advertising companies, content providers and licensors with advice on affiliate, publisher and partnership agreements, digital content licensing, syndication, distribution, Social Media and many other related deals.

Facebook Marketing: Legal & Regulatory Compliance By David M. Adler, Esq.

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AllFaceBook Presents AF Expo San Francisco June 27-29, 2011

COMMERCE & MONETIZATIONFacebook Marketing: Legal & Regulatory Compliance

The use of social media for marketing and advertising purposes is one of the fastest growing areas for business and marketers. The advent of social media sites like Facebook provides the opportunity for authentic interaction and engagement with customers. Therefore, it is no surprise that it is being used as a marketing tool by companies large and small to help them achieve their strategic goals. But with every technological development and opportunity, new legal and business risks present themselves. Understanding and minimizing these risks will help you maximize the opportunities. A best practices approach to social media marketing involves having the company’s philosophy, methodology, and guidelines captured in a comprehensive written policy that is clearly and regularly communicated to the employees, and regularly updated to keep abreast of new developments, opportunities and evolving legal guidance. Attendees will learn how to identify the legal issues and develop policies and procedures to keep informed about the current technology, marketing strategies and regulatory compliance.

Everyone at AF Expo shares a belief that the Facebook experience represents a paradigm shift in the way that marketing professionals identify, engage and convert customers. In the past, marketers had to conduct research to locate customs and to determine their wants and needs. Once these were identified, you needed to convince your customers to value your brand, understand your product/service and ultimately purchase what you were selling.
Facebook changes all of these assumptions. It offers an interactive platform where customs are actively engaged in seeking out the brands they are interested in – whether individually or through trusted networks, tell brand owned what they do and do not like about their brand and tell marketers whether they are open to receiving more information. Interestingly, the platform allows marketers to continue the conversation even when the customer has nominally disengaged (through trusted networks).
Like everything else, with great power comes great risks. Facebook marketing that is thoughtful, respectful and legally compliant is extremely effective. [give examples] However, marketing efforts that fail to understand and account for the requirements to maintain legal compliance can be a fixated.
In the beginning one could poke, like and comment. But what happens when you can purchase? Facebook is rapidly becoming a platform to identify, locate, contact and transact business with consumers of goods and services, both physical and virtual, using currency that is both physical and virtual.
My presentation will identify and explain the risks for Facebook marketers, grouped  into three risk categories, “The Three Cs” of Facebook marketing:
Content
Connecting
Commerce

Neoformix Tweet Topic Explorer is a Powerful New Tool For Social Media Marketing

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WordCluster Analytics Provide Rapid Visualization of Hot Topics

Kudos to Barry Ritholz and his Blog The Big Picture for turning us all on to a phenomenal new social media metrics tool: Tweet Topic Explorer.  This Tool retrieves the most commonly used words in recent (no word on time period covered by “recent”) “tweets” for a specific user and displays these visually using bubble clusters. The area of the circle for a word is proportional to that word’s frequency. Words most often used together are grouped by color.

For example, using my Twitter handle, @adlerlaw, produces a cloud that shows the words “film,” “media,” “legal,” “social” and “Chicago” are among my most frequently used words.  Looking at groupings, “Film” is used most commonly with words like “tax” and “indie.” The words “Law” and “Legal” appear most frequently with “social,” “media” “brand,” and “trademark.”

The potential for brand managers and social media marketing professionals is obvious. First, a brand manager can quickly and easily analyze what key words are being used and how they are being used for any given twitter handle. Note that if your handle is identical to a brand name, this is critical visual evidence of the words being used in connection with your brand! Second, if you area  marketing professional, you can analyze individual handles to get feedback on words being used by social media influencers and other specific followers.

The value should be obvious by now. This tool creates an amazing feedback mechanism. The brand owner/marketing professional can easily see if the message they are trying to communicate is really coming through as well as they intend. For example, check out the word cloud for “Coca-Cola.” I was amazed to see that the most frequent word is “^GD.” I don’t know about you, but that’s not communicating anything about the brand. Whereas positive attribute words like “sharing” and “delicious” are much less prominent.

Also, the potential to uncover negative words will be displayed prominently. This gives brand managers insight into the areas, issues and users that they need to target.

I’m not saying its going to be easy. In order to get the most out of this tool, one is going to have to spend time analyzing users one by one. However, this is one of the best tools I’ve seen that breaks tweets down into a clear, visual, actionable matrix.

ABOUT THE AUTHOR

David M. Adler, Esq. is an attorney, author, educator, entrepreneur and founder of a boutique intellectual property law firm based in Chicago, Illinois. With over fourteen years of legal experience, Mr. Adler created the firm with a specific mission in mind: to provide businesses with a competitive advantage by enabling them to leverage their intangible assets and creative content in a way that drives innovation and increases the overall value of the business. Learn more about me HERE.

David M. Adler, Esq.  Safeguarding Ideas, Relationships & Talent®