When engaging customers online, take precautions

Feelings, opinions and discussions on all topics are published on Facebook.  Twitter is used to report things people say immediately. People are able to find others with similar interests in almost real time. Companies are joining right in with this social media marketing revolution and capitalizing on attracting new customers.

However, with all the good that the Internet can bring for a company, a lot of bad is also lurking out there. Sometimes the most well-intentioned company finds itself in a lawsuit for doing nothing more than starting a conversation and engaging its customers.

While no lawsuit was filed, Best Buy learned a valuable lesson when it posted this question on its Facebook page:  “What do you think about offering our site in Spanish?”  A spokesman for Best Buy commented that this question turned out to be a “land mine.” There were hundreds of negative and off-color responses, so many that Best Buy shut its Facebook page down temporarily.

Companies must learn how to deal with social media marketing issues, or “social” as author Erik Qualman calls it. “You’re not as powerful as you think,” he writes in “Socialnomics.” “You are not going to enable social to happen.  It’s happening without you so you might as well be part of the conversation.”  An important first step is to understand what legal liability exists.

Each company has its own unique issues when it comes to social media marketing liability. For example, public companies governed by the Securities and Exchange Commission must comply with Regulation FD concerning the public disclosure of material information.

However, in general, all companies that allow user-generated content or commentary on their Web sites subject themselves to claims of contributory copyright or trademark infringement, or vicarious liability for defamation or slander.  The two most common laws that protect companies from these types of liability are the Digital Millennium Copyright Act (DMCA) and Communications Decency Act (CDA).

The DMCA exempts online service providers that meet the criteria set forth in the safe harbor provisions from claims of copyright infringement made against them that result from the conduct of their customers. These safe harbor provisions are designed to shelter service providers from the infringing activities of their customers.

If a service provider qualifies for the safe harbor exemption, only the individual customer who is infringing is liable for monetary damages; the service provider’s network through which the alleged activities occurred is not liable.

It is important to note, though, that the DMCA does not protect against all types of infringement.  For example, it does not protect against trademark infringement.  Nor does the DMCA protect against defamatory statements.

Under the CDA, no provider or user of an interactive computer service “shall be treated as the publisher or speaker of any information provided by another information content provider.”  The term “information content provider” means “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service.”  The operator of the Web site, so long as it does not participe in the creation or development of the content, will be “immune” from a defamation claim.

What’s creation?

Companies that operate various social media platforms that allow others to post comments can generally avoid liability for speech torts on their Web sites if they stick to traditional editorial functions, and do not allow those activities to expand into any conduct that could be interpreted as “creation and development” of the offensive conduct. However, where the line is drawn between editorial control and “creation and development” has not been clearly decided by the courts.

Although the CDA confers broad protection on service providers, it also provides that it shall not be construed “to limit or expand any law pertaining to intellectual property.”  In other words, a service provider cannot assert the CDA as a defense to claims that something infringes on another party’s intellectual property rights, even if it involves speech.

For example, if an intellectual property owner alleges infringement of its copyrights based on the uploading of protected material to the social media Web site, the operator has no CDA defense.  Rather, the intellectual property owner and operator will have to resolve claims under the Copyright Act, and particularly the DMCA. Likewise, if a trademark owner alleges trademark infringement or false advertising under the Lanham Act, the CDA will not shield the operator from liability.
Important agreements

When operating a Web site with a social media platform, companies should have well drafted terms and conditions of use agreements.  Generally, these agreements govern what is and is not permitted conduct on the Web site and expressly provides what steps the company may take to address any material breaches of the agreement, including deleting the end user’s account.  In addition to the various laws such as the DMCA and CDA, Web site agreements also help limit the risk companies have when operating social media Web sites.

Social media marketing is growing in importance.  It allows companies to engage current and potential customers on a level that in the past was impracticable and subsequently develop strong relationships with ease. By following guidelines in this article, companies can start participating with confidence, rather than feeling vulnerable when they decide to let control go.

Bradley Walz,
Winthrop & Weinstine:
612.604.6725
bwalz@winthrop.com
www.winthrop.com