1 © 2008 venable llp social media: opportunities and legal pitfalls jeffrey s. tenenbaum, esq. a.j....
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© 2008 Venable LLP
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Social Media: Opportunities and Legal Pitfalls
Jeffrey S. Tenenbaum, Esq.A.J. Zottola, Esq.
Venable LLP Washington, DCMarch 2, 2010
© 2010 Venable LLP
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Brief Summary of How Organizations Are Leveraging On-line Social Media
- What is on-line social media?
- Current trends in use of social media
Legal Issues – “Similar Issues, New Platforms”(1) Entity use of on-line social media platforms
- Defamation, IP, Privacy, Advertising, Antitrust, Tax
(2) Employee use of on-line social media- Workplace Environment, Recruiting/Hiring, Privacy,
Developing Policy
Agenda for Today
*Certain images used in PowerPoint are for research purposes only.
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What Is On-line Social Media?
(1) social networks – facebook, myspace,
(2) media repositories – youtube,
(3) blogs and microblogs – twitter
(4) wikis – wikipedia, medpedia, sidewiki
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Current Trends and Potential Benefits of On-line Social Media
(1) On-line Member Networks
(2) Real-time Customer Service
(3) Interactive Contests or Promotions
(4) Collaborative Educational Opportunities
(5) Virtual Campaigns
(CDC campaign badge)
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Entity Use of Social MediaDefamation
Act of harming reputation of another through false
statements to a third party
Comments made by others can be attributed to the
organization• example, Cisco Systems suit
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Entity Use of Social MediaDefamation
How to Avoid– Federal Communications Decency Act - § 230– Utilize disclaimers and terms of use– Enforce a take-down policy– Refrain from commenting on third-party posts– Consider available screening capabilities for third-
party hosts
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Avoid Trademark Misuse– Seek permission – Be especially careful in commercial context– Avoid using other’s trademarks in search terms,
domain names, or user names
Entity Use of Social MediaIP Issues
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Entity Use of Social MediaIP Issues
Be Mindful of Copyright Ownership– Who owns work on social media?– Work-made-for-hire doctrine, written
assignments of rights– Licenses: written licenses, click-wrap licenses,
implied licenses
Protecting Own Intellectual Property Rights– Monitor for misuse– Use clear placement of appropriate symbols - ©,
®, ™
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Entity Use of Social MediaMisleading Advertising
FTC Guidelines – Testimonials in New Media
– Applies when (1) “endorsement” and (2) “connection”
– Blogger and entity liability
– Entity doesn’t have to request endorsement
– Includes social media and network marketing
Cross-over to FDA Regulation
– Unsubstantiated representations
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Entity Use of Social MediaAntitrust
Communications prohibited under the antitrust
laws are similarly prohibited on social media
platforms
In addition, assume anything written will be read
in the worst possible light by antitrust enforcers
– for example, Whole Foods CEO Mackey’s
message board posts
Penalties for (1) corporation, (2) individual, and
(3) association
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Entity Use of Social MediaAntitrust
How to Avoid– Implement a written antitrust statement or policy
that is easily visible to users– The statement should prohibit discussions of:
• prices or pricing systems,• market allocation, • margins, • inventory levels, • reduction of output• statements that could be seen as encouraging
boycott of vendor, supplier, or competitor– Monitoring and Enforcement
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Entity Use of Social MediaTax Issues for Tax-Exempt Organizations
"Organizations and web designers must be aware
that the traditional rules with respect to
prohibitions on providing particular services,
treatment of advertising income, sales activity, as
well as lobbying restrictions still apply to website
activities."
2000 EO CPE at 140.
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Entity Use of Social MediaTax Issues for Tax-Exempt Organizations
Unrelated Business Income(a) trade or business, (b) regularly carried on, (c) not substantially related to organization’s purpose
Advertising usually UBI; qualified sponsorship is not
– banners– hyperlinks– online periodicals– virtual trade shows– online auctions
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Entity Use of Social MediaTax Issues for Tax-Exempt Organizations
Lobbying / Political Activity
– Limits and prohibitions on amount of political activity for tax-exempt entities
• 501(c)(3) – limited to “insubstantial” activities
attempting to influence legislation– ABSOLUTELY prohibited from campaign
intervention
• 501(c)(4) – primary activity cannot be campaign
intervention
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Entity Use of Social MediaTax Issues for Tax-Exempt Organizations
Lobbying / Political Activity
– For 501(c)(3) organizations, if making 501(h) election, subject to certain dollar limits
– Considerations
• hyperlinks
• third-party comment
• disclosure/disclaimers
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Entity Use of Social MediaPrivacy
Remain aware of the collection and use of
personally identifiable information– Available notions (or rights) of privacy still
recognized across on-line social media– Consider use of privacy notices describing
data collection and use – Remember to obtain or seek consent when
necessary– Be mindful of privacy policies and practices of
third-party platforms for / operators of social media networks
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Employee Use of Social MediaWorkplace Environment Issues
Use is likely inevitable.
So, avoid “head in sand” approach
Develop social media policy that addresses
permissible use while guarding against legal risk
Risks:
– Attribution to Entity
– Release of Confidential Information
– Harassment
– Loss of or Damage to Proprietary Rights
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Employee Use of Social MediaWorkplace Environment Issues
"the fact that the electronic bulletin board
may be located outside of the workplace… does not mean that an
employer may have no duty to correct offsite harassment by co-employees.
Conduct that takes place outside of the workplace has a tendency to permeate
the workplace." Blakey v. Continental Airlines, 751 A.2d 538, 549 (NJ 2000)
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Employee Use of Social MediaRecruiting/ Hiring
Can you investigate potential employees using
social media?
– YES, but…
(1) make sure employees cannot claim employment discrimination on prohibited factor
(2) review social networking sites in a systematic manner
(3) remain aware of privacy rights
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Employee Use of Social MediaLimitations
Limits on investigative powers of employers
– Certain jurisdictions prohibit adverse employer action for off-duty activities
– Fair Credit Reporting Act
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Employee Use of Social MediaDeveloping Policy
Consider Rules for Collaboration Involving
Interactive Forums
Outline Best Practices for Publishing Material on
Social Media
Prohibit Use of Inappropriate On-line
Names/Identifiers
Identify Limits on Acceptable Use of Company
Resources
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Questions?
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contact informationYOUR VENABLE TEAM
Jeff Tenenbaum, [email protected] 202.344.8138f 202.344.8300
A.J. Zottola, [email protected] 202.344.8546f 202.344.8300
www.Venable.com
© 2010 Venable LLP
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the road ahead for ABC CORPORATION