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Direct Response Marketing

Legal Reviews: Four Legal Issues Stare Down Social Marketing Planners

1 Feb, 2011 By: Gregory J. Sater, Benjamin Alexander Response


Sater and Benjamin Head Shot

You’re the CEO of a company with a successful DR product. One night, you’re searching for it on Google and what do you see? Consumer reviews on "social media" sites that are criticizing your product. You even see links to YouTube videos shot by consumers in which they call your product a rip-off and in some cases say that, after hating your product, they tried your competitor’s and loved it!

Stressed out by this, you search the Web until, finally, you find consumers who have posted blogs, Facebook entries and YouTube videos praising your product. You breathe a sigh of relief. Still, you do feel a little uneasy because you notice that, in a few cases, some of those consumers also are making some pretty vicious and untrue statements about your competitor’s product.

The next day, you mention what you saw to your chief marketing officer. Only then do you learn that many of the glowing reviews about your product, and some of the extreme ones about your competitor’s, actually were posted by people employed by your company or, in some cases, "online affiliates" that, it is explained to you, nobody at your company personally knows because they come through various affiliate networks, but who are being paid to generate online leads.

"Everyone does it," the CMO says. "The negative social media about our product is coming from people who are being paid one way or another by our competitors!" You ask yourself, "Is this legal? What are the rules of this game?" The answer is, the rules are being written now — case by case. New precedent is being set all the time.

What Are the Legal Issues? Here are four of the biggest legal issues arising from social media posts that are made as part of a marketing campaign, when made by a marketer and/or someone who has a financial or material connection therewith:

Intellectual property infringement. Does the content of the post, or does the URL it’s found on, infringe a third party’s copyright or trademark rights? Or, does it misuse your company’s trademarks, copyrights or other IP?

  • Defamation, rights of publicity and privacy, and other torts. Does it libel or slander a third party or their product, or violate someone’s rights of publicity or privacy?
  • False or deceptive advertising. Does it make unsubstantiated claims about your product or disparage your competitor in a manner that isn’t substantiated? It’s not only the Federal Trade Commission (FTC) that can sue you for this — a competitor can, too.
  • Endorsements and testimonials. Does it comply with the FTC’s guidelines, for instance, by being from a true user of your product and by adequately disclosing the nature and existence of any "material connection" between you and the one making the statement?

While there’s no denying that it’s essential to try to communicate with the public using Facebook, Twitter, YouTube, blogs and, for some, affiliates, it’s critical to understand the legal issues that are implicated by such uses of social media. Any employee of yours, any paid spokesperson and any Internet "affiliate" could cross the line and create liability for you.

The FTC, litigious competitors and class-action lawyers are all watching. In fact, the FTC just sued a marketer called I Works for "misrepresenting that the positive articles and other Web pages about (its) products posted on the Internet are independent reviews from unbiased consumers who have successfully used (the) products" and for "failing to disclose that the positive reviews were created and posted by (the company) or (its) agents."

In an upcoming issue of Response, we will give you practical tips for addressing these legal issues with a social media policy. Our law firm recommends that every marketer write such a policy to focus itself on the key task here — to monitor and control the social media content of everyone and anyone who has a financial connection with the company. Such a policy also should help you avoid liability if someone connected to the company posts something online that violates the law.


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