Educate Yourself on Social Media Risks

Always keep in mind that there are regulations and guidelines that must be adhered to when conducting even the most basic social media efforts! Let us discuss a few major points of concern that every business owner should be aware of.

Social media marketers must find out whether a consumer is acting in an independent role or rather through a company pushing its brand or message. Should there be any claims of false advertising or misinformation; the company may be responsible and held liable for a consumers’ statements.

This also applies if the consumer does not disclose a material connection exists with the company, when in fact a material connection does exist. The responsibility is on the side of the company, not the consumer to disclose this material connection.

Testimonial Marketing

A material connection exists, according to the FTC, when there is more of a relationship than a mere cash payment. Sweepstakes entries, coupons and gift cards all represent a material connection. For example, when a company provides certain perks, such as sponsoring a party or giving out gift cards, to promote itself through brand support from its followers or patrons via testimonial marketing; when those supporters post positive reviews, the material connection between consumer and company must be clearly disclosed.

A Consumers’ Material Connection Must Be Disclosed

Of course the immediate question is how does a company minimize its legal exposure from consumers with a material connection to the company who fail to disclose this connection?

The answer is that companies should have a well-thought out policy for social media endorsement efforts. Specifically, companies should not only have a policy aimed at bloggers and endorsers of the company or brand, but should also take active steps to monitor and enforce that policy.

Evidence of successful monitoring and enforcement of a company’s policy can make all the difference in case of legal exposure.

In short, companies must take reasonable steps to monitor compliance of their policy by bloggers, endorsers and brand enthusiasts. The FTC continues to be engaged in enforcing their guidelines and as the internet continues to shift and improve, so will its regulations. At the moment, a solid policy with continuing enforcement greatly minimizes a company’s legal exposure when consumers fail to properly disclose a material connection exists between the two parties.