What is the current law covering user trends and how businesses interact with customers and partners through social media?

Will Richmond-Coggan, a newly-appointed partner in Pitmans LLP’s dispute resolution team and a specialist in online defamation and reputation disputes, says: “The law applicable to social media is still very much in a period of evolution. There is currently a tension between the manner in which the law treats publications made informally in the social media environment, and the way in which most users (corporate or individual) view their responsibilities.”

“Consequently, it is still important to urge caution in social media interactions. In many respects, the desire from a marketing perspective to create natural and organic conversations with customers has to be tempered with the recognition that any statements made are treated formally as publications by the company, with all of the formal legal consequences that flow from that.”

How is the law changing and can you see where changes are leading the industry?

“One welcome recent development is the Director of Public Prosecutions’ clarification earlier this year (following consultation) on the circumstances in which prosecution for statements made online generally, and on social media platforms in particular, will be considered appropriate and proportionate. Another, from the point of view of the operators of social media platforms or other online forums, is the new Defamation Act, which will in due course provide a helpful mechanism for such operators to pass liability on to the true culprit in such cases, the author of the defamatory postings.”

It is too early to say where these changes might lead, but it is likely that publishers and hosts will be able to engage in social media conversations with increased confidence, subject to ensuring that their own personnel adopt appropriate policies and practices.

How is this impacting on the actions of people and businesses on social media (in the UK and around the world if different)?

Philip James, Partner and Joint Head of Technology at Pitmans LLP, advises clients on digital media and data privacy and comments: “Businesses are becoming increasingly sophisticated in the way in which they use social media to engage with customers. Brands are often on a rapid learning curve in relation to the ways in which such engagement differs from more traditional marketing. Social media cannot be used as a broadcast medium, it is subtler than that and requires greater interactivity. As businesses develop greater confidence that they understand the legal and social parameters of that process, so they become more adventurous and imaginative in the way that they use the medium.”

“Rather than always reaching for the last resort remedy of litigation, when comments are made in such forums that are disparaging or even harmful to the brand, we have seen clients recognising that constructive engagement, or even dignified silence, can be more effective approaches in certain cases. There is nothing more valuable to a business than to have engaged customers actively leaping to their defence, without having to be prompted or co-ordinated. Ultimately legal remedies remain available for the most serious problems, but for the rest a sophisticated business will have a range of nuanced responses available depending on the situation.”

While no legislation specifically targets social media, laws in relation to intellectual property, data protection, discrimination, defamation, advertising and marketing regulation, privacy and harassment apply equally in the existing virtual world as they do in the non-virtual. For instance, Daybrook House Promotions has recently been ordered to pay damages of over £5,000 in settlement of what would have been a commercial licence fee for unlawfully using a commercial photographer’s photo downloaded from a social networking site to promote a venue Rock City in connection with its ‘Floor Fillers’ dance events (this excludes the significant costs and resources required to  defend claim by Jason Sheldon, the photographer). That said, there are clearly added challenges of enforcement and identification in the virtual world.

Why should businesses be aware of this legislation and what impact does it have on their social media if they don’t abide by it?

Businesses should be aware of laws that apply to their activity in social media so that they can maximise the benefits (and limit the risks) of social media. These include presenting a positive image of their business in the public domain, sharing information, knowledge and best practice with others, networking opportunities and gaining information about candidates for recruitment (and even attracting and recruiting candidate solely via social media).

Internally, virtual communities can contribute to increased cohesion between groups of employees; information, knowledge and best practice can then be quickly shared among them.

An organisation should consider carefully whether or not (as well as how) to engage and interact with social media. Brands using social media should decide upon an effective social media strategy. For instance, whether they wish to monitor a social media channel proactively or reactively, since each approach has a different risk level attached to it and varying degrees of liability in law. In addition, brands and their PR agencies need to decide how they wish to respond to negative comment; censorship can be counter-productive.”

Philip James warns that, “Social media is not always the most appropriate means of communication, since by nature it is more difficult to control. In addition, although it is often thought of as a ‘free’ means of marketing, it can require significant cost and expense to implement and run and needs to form part of an integrated long term strategy. There are also inherent risks in following a transparent and open campaign. Further, once a campaign ‘goes viral’ it can be difficult to remove.”

“However, there are significant and exciting opportunities for social media; recruiting consumers and advocates of your brand and building brand loyalty can result in a very powerful army of brand ambassadors. By deploying a ‘word-of-mouth’ marketing campaign strategy, brands can develop and build substantial trust through such ambassadors.”

How can businesses adapt to these restrictions to deliver strong media campaigns?

There are potentially three heads of preliminary action a business should take to prepare for and mitigate any liability that may arise from an organisation’s use of social media in the context of employment and security. These are:

  • Policy: Develop a social media policy, which clearly sets out the employer’s expectations of its employees when using social media. It will detail what is and what is not acceptable along with the consequences of failing to comply.
  • Employment contracts: Include clauses in employment contracts, obliging employees to keep employer information and secrets confidential. There should also be clauses covering the employer’s trade property rights, making it clear they belong to the employer and that use of these rights is prohibited unless the employer gives its consent.
  • Security: Employers should have security in place, using appropriate policies and encryption of sensitive data (e.g. confidential information, intellectual property and personal data) on mobile devices. Material should be removed when it is no longer required. Guidance and training should be provided on the use of such devices and security checks carried out to ensure they are protected.
  • Contingency Response Plan: have and rehearse a response plan to respond to incidents which evolve from use of social media (either by the organisation or in reaction to social media trends and comment on social networks). This requires a governance structure, clear lines of communication, a step-by-step approach (coupled by agility and flexibility in responding in an innovative manner) and a good relationship with our internal and external PR and communication(s) teams.
  • Insurance: consider reviewing your current policies to check whether they cover incidents which relate to social media loss and exposure.

For the most part, social media is an exciting and effective means of engaging with your audience; however, you need to ensure its use is justifiable and matches your organisation’s objectives, brand and risk profile. It also rarely succeeds when used alone in the absence of links to other forms of media.

What advice can you offer to any business that is building a social media strategy on how to work within legislation effectively?

It is important to devise a policy that is not only in line with current legislation but also reflects current social trends. Following this will ensure certainty among staff that they are acting within the law and the sanctions they will face should they breach the policy.

However, employers must also remain realistic if an employee makes unwelcome comments. They should ask for comments to be taken down and, if this is not possible, take steps to respond in a measured and considered manner so as to minimise any potential damage.

Employers may wish to monitor their employees’ Linked In and other social network profiles: when doing so, this must be proportionate and justifiable as there is a fine line between an employer protecting its interest and undermining an employee’s expectation of privacy and freedom of speech.

An organisation should monitor, listen and keep up to date with their digital reputation, regularly searching words relating to their business, keeping track of what is being said about them and, if necessary, either seek removal of certain content or respond objectively with constructive comment. Identifying risks early can be an invaluable means of preparing for attack or countering negative comment. ”A variety of tools are available in the market to help clients in this regard” adds Philip James.

What do you feel are the most important factors to consider in this regard?

“One key risk is the use of a company’s name or logo inappropriately or where an employee or a third party suggests an association which is false. An employer needs to be able to control their brand”.

Moreover, where the employer provides their employees with devices such as mobile phones or tablet computers, the risk that these will be lost or stolen poses a significant security threat to businesses.

“Often many devices are used without a pass code, which would otherwise prevent unauthorised access, and so there is a real risk that confidential information about the employer or its clients can be accessed and leaked into the public domain,” Philip James comments.

“Employers should also keep in mind that these devices have inbuilt cameras, video recorders and voice recorders, and should consider the risks in this regard.”

How can a business in a highly regulated industry make the most of social media in spite of their limitations?

James suggests the following tips for businesses on how to make the most of social media:

Be engaging and interactive: the employee should write in the first person, identifying their connection with the company and adding highlights of personal character. They should stimulate interest in their work and invite a dialogue in order to learn from others doing similar or related things.

  • Develop and follow a structured social media strategy.
  • Measure the effectiveness of that strategy using appropriate metrics. Consider the value of your contribution before you post.
  • Respond to mistakes quickly. If you post something in error, act quickly to correct it.
  • Your credibility is judged by your accuracy and your willingness to recognise and fix your mistakes. If you modify an earlier post in a blog, be upfront about doing so.
  • Be respectful. It should go without saying that an employee should never post anything that might be offensive to others, such as sexual comments or racial slurs.
  • When using social media to market, be careful not to engage talent ambassadors to endorse certain brands without making the commercial relationship clear.
  • Conduct due diligence on third party apps which collect user data to ensure they respect privacy and data protection laws.
  • If in doubt, seek legal advice before presenting unknown third party apps as part of pitches to clients.

What will the environment look like for businesses in five years’ time?

Will Richmond-Coggan: “The new Defamation Act is going to come into force at the end of this year. For businesses who are publishers or authors of content this, and other parallel reforms, will probably give rise over the next five years to an online environment in which they will run fewer risks of inadvertently incurring liability for publications made or hosted by them. Conversely of course, for companies who are on the receiving end of defamatory or other brand-harming statements, additional hurdles will have to be overcome before formal remedies can be secured.”

This article was first published in The Raconteur in June 2013 – see article here.