FTC Guides Suggest Social Media Policies and Procedures Might Reduce Liability Risks

October 9, 2009 at 10:24 am Leave a comment

100_2987At the onset of this post, I want to be very clear that I am not intending to send fear coursing through the veins of senior management nor should this be construed as a “let’s all find another reason to fear social media”.

Quite conversely, part of leveraging a strong social media business strategy is ensuring the appropriate operational controls are in place.  Policies, standardized practices and process are a responsible part of any business strategy and the business strategy of social media should be no exception.

This week, potential liability regarding the use of social media hit home as the Federal Trade Commission (FTC) released new Guides concerning the use of endorsements and testimonials in advertising.  Essentially, the new guides will work to ensure a higher level of honesty and transparency in the use of the social web for the purpose of marketing in terms of “pay to say” disclosure and factual representations.

Though I am not  a lawyer (nor have I ever played one on TV) and always encourage consultation with legal counsel, I did read through the 81 page FTC document yesterday and came across an important consideration which I don’t believe has been adequately highlighted.  That consideration is the liability an employer faces for the actions of employees engaging in social media activities either within or outside the scope of their work responsibilities.   The FTC addresses this scenario in response to a question which appears to have arisen during an open comment period relating to employer liability.  Below is a verbatim excerpt from the FTC’s response:

“…although the Commission has brought law enforcement actions against companies whose failure to establish or maintain appropriate internal procedures resulted in consumer injury, it is not aware of any instance in which an enforcement action was brought against a company for the actions of a single “rogue” employee who violated established company policy that adequately covered the conduct in question…  The Commission does not believe, however, that it needs to spell out the procedures that companies should put in place to monitor compliance with the principles set forth in the Guides; these are appropriate subjects for advertisers to determine for themselves, because they have the best knowledge of their business practices, and thus of the processes that would best fulfill their responsibilities.” see page 48 of the complete FTC document for full text

What this means is it is time to create social media policies and practices within your organization which carefully balance innovative business uses of social media with clear lines drawn on unacceptable practices.

While it is my intention to use my Association 2020 blog to add value to our community rather than endlessly promote my consulting practice, Social Frequency Media Communications, this is one instance where I want everyone to know that social media internal policy and procedure development is a core part of my services.  Click here to learn more about Social Frequency Media Communications or feel free to contact me directly at stuart@socialfrequency.net.

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Entry filed under: Innovation, Managing Change, Messages from Stuart, Organizational Management, participation, people, Social Media, Uncategorized, Volunteer Strategy, Web 2.0 and Beyond, Web Me.0. Tags: , , , , , , , , , , .

FTC – Bloggers Liable for Endorsements and Misleading or Unsubstantiated Representations What Social Media Means to Associations – Beyond Mere Facebook Pages and Twitter Accounts

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