Management May 15, 2013 Last updated September 18th, 2018 729 Reads share

Managing Social Media Risks: A Legal Guide For Your Business

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The purpose of this post about social media risks is to help you manage social media effectively in your business. Don’t let legal issues with social media ever be a reason not to use it if it is something that would benefit your business. But do identify the risks and manage them to acceptable levels beforehand. 

  • There are few guarantees in life but I can guarantee you that it will be far more costly to deal with these types of problems after they arise than to take some simple steps to prevent them from occurring in the first place.
  • I hope you find this guide useful but please remember that everything in it is general information only and nothing in this guide is legal advice.
  • One bit of advice that I will give you is that when it comes to something as important as your business, you should seek expert help in managing risks before they ever become problems.

Managing social media risks: a legal guide for your business

How is Social Media different from traditional media?

Traditional broadcast media is one to many. Social media is one to one and many to many. In social media everyone is a publisher, everything that happens online happens in public, in real time and leaves a permanent trace.  Social media is about people, the clue is in the name.

How do people use Social Media?

Some people don’t understand social media and don’t use it properly. It isn’t a form of one way broadcast: issuing press releases and news items from a Twitter account or Facebook page might get a certain amount of attention but for things to really work in social media there has to be a two way engagement:

  • This is the essence of it and the beauty of it. People develop real relationships via social media which can be a very strong bond with your business.
  • However this is also the riskiest aspect of it from a business owner’s perspective as it is not something that can be readily controlled as it happens in real time. And because you have real people on both sidse of the interaction, if the person representing your business doesn’t have a clear understanding of what they can and can’t do and what does and doesn’t work, there is potential for serious damage to be done in a very short time.

How not to use Social Media

Let’s looks at one example of how not to use social media: Anthony Wiener, US Congressman and an early user of social media. He had a considerable Twitter following and you would have thought he knew what he was doing on the medium.

For anyone not familiar with Twitter there are basically two ways of sending messages – public or private.

  • Mr Wiener took a photo of his groin in a certain state of arousal and sent it via a message on Twitter to a female follower. He meant to send it as a private “Direct Message” but he pressed the wrong button and it went as a public Tweet. The consequences for him were catastrophic.
  • His first reaction was a common one on social media, he claimed his account had been hacked. However, overwhelming evidence of the contrary was provided by a huge number of helpful Twitter users and Mr Wiener had to come clean. He ended up resigning and making a tearful apology on American TV.

[youtube]http://www.youtube.com/watch?v=nC8uW3RBXeY[/youtube]

This is an example of someone who should have been familiar with the medium and who was in personal control of his own social media content who made a drastic error of judgement combined with a simple technical mistake – he pressed the wrong button.

I cannot think of a better example to highlight the importance of taking appropriate measures to set clear boundaries, to manage social media use when businesses consider letting others, either inside or outside their business, control social media content which impacts directly on that business’s brand and reputation.

Law is playing catch-up

Users aren’t the only ones who sometimes don’t get social media or use it appropriately. Lawyers and the courts have also been slow to really come up to speed and understand how social media works and what is the most appropriate means of dealing with matters when things go wrong.

What have been referred to as superinjunctions in the UK have shown up how the law has had difficulty in dealing with the problem presented by social media use.

  • Superinjunctions in the UK have generally come to refer to the type of injunction taken out in advance of a story being published to prevent it getting out. Here the reasoning goes that if the court application for the injunction itself was reported that would defeat the effect of the injunction and therefore the superinjuction prohibits any report of the fact that it was applied for in the first place.
  • But these injunctions sought by lawyers at extraordinary expense have proved, in the case of some individuals, to be a complete waste of money. The injunctions involved are extremely high powered and expensive legal devices, but in these cases were singularly ineffective in achieving the desired result. It seems to be a clear case of not understanding the medium when considering a legal course of action with a view to achieving a desired objective.
  • So those familiar with the medium have come spectacularly a cropper on it and even the most well paid lawyers have failed in protecting some individuals from their own folly on social media – so does this mean that you shouldn’t use it for your business, absolutely not.

What you should do is understand the risks associated with the medium and manage those risks effectively.

What are the risks and how do you manage them:

  1. Defamation.
  2. Employment Law.
  3. Privacy and Data Protection.
  4. Third party agreements – third party postings and suppliers/outside consultants.

Social Media. What are the risks and how do you manage them

# 1. Defamation

It is a sign of the change in communications that I as a lawyer am writing a general guide for business owners on defamation. Just a few years ago this would have made no sense other than for those in the publishing business. However social media now means that all businesses are publishers.

So let’s take a look at what we’re talking about:- 

In simple terms defamation occurs when a false statement is made about another person that damages their reputation. However it has to be communicated to someone else.

  • If you have two people together and one says to the other “you are a liar and a cheat” there is no defamation. There may have been a punch thrown but there won’t be a legal action out of what is said.
  • If someone says to someone other than the subject of the statement “that man is a liar and a cheat” now you have the start of defamation. And if someone stands up in front of a room full of 150 people and says “he is a liar and a cheat” well then you really have defamation. Although the first practical rule of defamation proceedings is that the person responsible has to be worth suing in the first place, and I’ll come back to that in a moment.

When we’re standing up in front of a room full of people we’re usually pretty careful about what we say because we feel the glare of the public place.

Posting online can feel a lot less inhibited as Mr Wiener found out to his cost. And defamation does not have to take the blatant form that I have chosen here of calling someone a liar and a cheat, it need just be a statement that is untrue and causes harm to the reputation of another. Defamation can now also be suffered by a company and not just an individual.

So where can it be an issue in social media?

  • Posting by you or on your behalf on social media sites: e.g. Twitter/Facebook/blog
  • Posting by you or on your behalf on review sites: e.g. Tripadvisor
  • Comment posting by third parties on your Facebook page or blog.

How do you manage it?

Understand it!

Make sure everyone posting content on social media about your business understands it. You need to have clear policies in place with employees and contractors to govern content creation and appropriate usage. You also need to have clear policies to govern how postings by third parties are to be managed.

  • Have a clear understanding of how to react appropriately when a potential defamation situation arises. Have access to advisers that understand the medium. The critical time in defamation is the period immediately after the statement is made or the item published. Whether the matter ends up in litigation or not may depend on how this is handled.
  • The crucial documents in a defamation case are not the complicated pleadings and affidavits when the matter is winding its way through the courts, the crucial items are the statements made and letters sent in the immediate aftermath. They will in all likelihood determine the ultimate outcome.
  • How this is managed in the heat of the moment is critical – no amount of lawyers afterwards are going to be able to undo that and any amount of them are going to have an interest not to. And this is not the time to start developing new relationships, this is a time at which you will need someone who you trust and who understands your business and the medium you are working on to help you to prevent this from happening in the first place and to mitigate things as much as possible if it does happen.

Launching the legal Exocet missiles may sound impressive and may be all that some have to offer but unless the objectives to be achieved and the most appropriate means of doing so are clearly understood by all involved, it may, as in the case of the superinjunctions, be utterly counterproductive. Better avoided if possible.

Consequences for business:

  • Damages – the largest ever award in an Irish court in defamation was €10M and the publication concerned was merely a press release sent by a private company rather than a publication by a major news outlet.
  • Costs – significant unless nipped in the bud. There can be no incentive to minimize costs if there is no long term business relationship with the adviser.
  • Impecuniosity of the other side – the target in a defamation case must be a mark – but the party bringing the action need not be – therefore successful businesses are exposed to risk and they cannot hope to recover costs of unsuccessful cases brought by those unable to pay.
  • Insurance – check your policy of insurance to see what you are covered for. Some business policies cover it for the more traditional situations such as shop lifting when someone may claim they were defamed when accused of a criminal offence in a public place.

# 2. Employment Law

This is the critical area in which the practical management of your social media content will occur. If this is not managed properly and proactively there really is potential for disaster, but the good news is that it can be managed effectively and relatively easily with a bit of foresight and planning.

Issues:

  • Clear agreements with employees setting agreed boundaries.
  • Clear policies on content and usage integrated into agreements.
  • Practical management of resources.
  • Policies to protect against inappropriate behaviour by employees impacting on other employees – acceptable usage.

Internet policies on content and usage

Clear agreements with employees setting boundaries:

The employment agreement with the employee who is creating social media content needs to address this aspect of the role specifically. It needs to define clearly what is and is not acceptable and consequences that will arise for failure to observe those standards.

  • You do not want to have a situation where an employee runs amok online and you are left with both damage to your business and no clear remedy against your employee.
  • When a problem arises is not the time to start thinking about how you might deal with the situation. Set the ground rules in advance and incorporate them into the contractual relationship to prevent this happening in the first place.

Policies on content and usage:

Your contract of employment is only going to be able to deal with things at a general level. The internal policies which govern your content creation are really going to define the nuts and bolts of what can and can’t be done. The policies need to be in clear straightforward language and tailored for the organisation. Cutting and pasting something is only going to be of limited value because it probably is not even going to be read.

The policy document needs to be one that your organisation really takes ownership of and reflects what actually goes on. Ideally it should be prepared in-house with some guidance and advice to ensure it covers all the necessary aspects. Some piece of legal boilerplate that no one understands or ever refers to is practically pointless. If anything does ever arise you are going to want to be able to refer to something that was actually used in practice.

Practical management of resources:

This is perhaps the most important common sense aspect – make sure you have control over your own social media. This does not mean you micro manage every aspect, precisely the point of everything we are talking about here is that you can’t and you shouldn’t. But you should have control over the infrastructure.

  • You need to control what accounts are opened for your business and make sure that they are associated with your profile and that you are the administrator.
  • On sites like Facebook a great deal of value can reside in the profile, i.e. the number of likes to a page or friends to an individual. If the practice evolves where the employee sets up the account and then leaves, this can cause enormous problems. If they leave in acrimonious circumstances these problems can be insurmountable.

We all know how inflexible Facebook is and how difficult/impossible it is to get any satisfaction from complaints. Therefore you must make sure you’ve got a handle on this. Again it should all form part of a coherent written resources policy.

Acceptable usage policy:

One aspect of your policy document is to provide a structure on your relationship with your employees, but how your employees conduct themselves towards one another is equally important and acceptable usage is an important part of this. The classic example of what needs to be covered here is the accessing and circulation of inappropriate content in the workplace. Failure to provide the appropriate structure may leave you liable; not to the employee responsible but from others in the organisation who are exposed to that employee’s unacceptable behaviour.

# 3. Privacy/Data Protection

This area warrants its own entirely separate guide (check back here soon) but you need to have it covered. Customer contacts and other details that you may be gathering for marketing purposes are personal data and have to be handled in accordance with the strict statutory regime. You must have a clear written policy in this area and it must be understood and followed. Particular care must be taken when data is being transferred abroad.

# 4. Third party agreements/Intellectual property

Again this subject warrants a whole guide in its own right but it is one to bear in mind when dealing with outside consultants. Similar considerations to employees arise in relation to securing control of the set up so that you are not held to ransom or left high and dry if there is a parting of the ways.

In the case of external consultants there is the additional issue of ensuring that you secure the intellectual property rights (copyright etc.) in anything created by them and this should be covered by the consultancy agreement. Anything created by employees will be deemed to belong to the employer’s business unless there is agreement to the contrary but this should be covered by the employment agreement in any event.

Final Thoughts

The one big takeaway from all of this is that while there are issues associated with effective implementation of social media that is no reason not to do it. You need to identify the risks and manage them to acceptable levels with effective systems. However, if this isn’t done in advance the potential for largely avoidable problems does exist.

Don’t let the first time you take the right legal advice be when you first encounter a problem as by that time it may well be far too late.

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Flor McCarthy

Flor McCarthy

Flor McCarthy is managing partner of McCarthy & Co. Solicitors, a niche legal practice specialising in providing a nationwide service in personal injury and medical negligence litigation to clients throughout Ireland.

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