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Do Not Ignore These Social Media Legal Issues!

July 21, 2011

Social media is huge right now – and it will only become more important as time goes on. Businesses in every industry are taking advantage of social online sites to promote their brand, run advertisements, connect, share news and information, and encourage customer interaction and feedback.

With that said, it’s crucial to understand the legal side of social media marketing – your responsibility as a business to make sure all your practices are above board. You may not even be aware of some of these legal issues or requirements, so read carefully and share with anyone else you know who might benefit from reading this article!

Taken from – Read the full article here.


Smart Thinking – Pass It On


4 Social Media Legal Issues Dealers Can’t Afford to Ignore
By Jim Radogna

It was bound to happen. The tremendous growth of digital marketing and social media was an invitation for government regulation. Proper social media ethics are now a matter of law, not just personal preference.

Faking Reviews
The FTC’s updated Endorsement and Advertising Guidelines require companies to ensure that their posts are completely accurate and not misleading, and planting or allowing fake reviews is a violation. The Guidelines are extremely broad and can apply to anyone writing reviews on rating sites, web sites or promoting products through social media sites, including blogs.

Dealers may face liability if employees use social media to comment on their employer’s services or products without disclosing the employment relationship. The FTC requires the disclosure of all “material connections” between a reviewer and the company that is being reviewed.

Paying For Reviews
Because there are no factory gatekeepers when it comes to online ratings, it may seem tempting to offer customers an incentive to post a positive review.  The good news is that you can if you want to; the not-so-good news is that the regulations require that any reviewer provided with any form of compensation such as free services, rewards, incentives, promotional items, gifts, samples, or review items, must fully disclose the source and nature of any compensation received. So, if you pay for reviews and the reviewers fail to disclose their compensation, you may face liability. This is an area where it’s easy to get caught and besides the legal danger, your reputation will likely take a big hit.

Advertising on Social Media Sites
Despite the fact that social media tends to be a low-keyed, casual type of communication, advertising regulations don’t go away. In fact, The Federal Trade Commission recently announced that it was updating its document Dot Com Disclosures: Information About Online Advertising.

So, in a nutshell, if inventory is posted or prices/payments are quoted on social media it’s likely that the posts will be deemed to be advertisements and will be subject to state and federal disclosure and truth in advertising regulations.

Social Media Policy
Social media applications such as blogs, social networking, and video sharing have soared in popularity so it’s important that dealers control the information that’s coming out of their business. Policies and procedures should be put in place to spell out how employees are expected to conduct themselves within social media.  A social media policy can help take the guesswork out of what is appropriate for employees to post about a company to their social networks.

Jim Radogna is President of Dealer Compliance Consultants, IncClick here to read this article in its entirety.

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