Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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Lawrence W. Gallick

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Social Links: Going Back to Cali

Yesterday the European Court of Justice (ECJ) followed the core of the Opinion of the Advocate General (AG) in Schrems v. Data Protection Commissioner (Case No. C-362/14).In sum, the ECJ held that:1. Member State Data Protection Authorities (DPA) must be allowed to:<ul><li>examine complaints from individuals regarding the treatment of their personal information by other countries;</li><li>bring cases to court to question the validity of adequacy decisions; and</li><li>suspend the transfer of personal information to other countries when they believe it is appropriate.</li></ul>2. The Safe Harbor Decision is invalid because:<ul><li>US companies may provide information to the US government to protect national security, public interest or law enforcement requirements;</li><li>The US does not provide European individuals with the ability to obtain judicial redress in the US; and</li><li>The European Commission overstepped its authority by limiting the bases on which DPAs could suspend transfers to the US.</li></ul><h4>Implications</h4>This decision opens the door for every DPA to evaluate whether other countries outside the EU provide adequate protection for personal information. The Standard Contractual Clauses (SCCs) specifically give the DPAs the authority to prohibit or suspend transfers to other countries when the DPA determines that the laws of the other country are insufficient to protect privacy. Similarly, the adequacy decisions for Switzerland, and Canada and Argentina all provide authority for the DPAs to suspend transfers to these countries. Thus, the ultimate effect of the ECJ decision is to remove certainty and disrupt harmonization across the European Union and allow each DPA to decide for itself what cross-border transfers are permissible.Moreover, because the invalidation of the Safe Harbor Decision was based, at its core, on a finding that the U.S. does not provide adequate protection for personal information, that same logic can be applied to every other adequacy mechanism such as Binding Corporate Rules (BCRs) and the SCCs. Thus, a second result of the decision is that none of the existing adequacy mechanisms is a safe bet at the moment because the DPAs now have authority to independently determine if the recipient country, such as India, Brazil, China or the U.S., provides appropriate security (independent of the adequacy mechanism).This decision demands a political solution that addresses the following points:• The EU and the U.S. must agree on what protections will be sufficient to protect personal information. It is worth noting that on September 8, 2015, the EC and the U.S. agreed on privacy safeguards to govern the exchange of personal information in the context of cooperation between law enforcement agencies. If the safeguards that the U.S. and the EC are willing to implement are adequate in the context of direct sharing of personal information between law enforcement authorities, surely those safeguards should also be adequate when U.S. companies transfer data to law enforcement. By not agreeing to these safeguards at the appropriate governmental level, companies are forced to either violate the European data protection rules and share the personal information as lawfully ordered by U.S. authorities, or they can refuse to share the information and be at risk of penalties for not responding to a lawful request from the U.S. government. This type of catch 22 situation will not be solved under the draft Data Protection Regulation. The issue will only be exacerbated as violations of the European privacy rules will carry the risk of a fine of 2% of a company’s global revenues.• A consensus must be reached within Europe regarding whether harmonization is a priority and how important having a single market for the sharing of data will be.<h4>Practical Implications for Companies</h4>Companies have only a series of bad choices before them:• They can take steps to immediately substitute another adequacy mechanism for the Safe Harbor such as BCRs or SCCs. This, however, will leave them entirely vulnerable to any DPA taking the position that the recipient country does not provide adequate protection and thus suspending or prohibiting the transfer based on those other mechanisms.• Companies could state that they will not allow any government access to personal information received from Europe and then potentially place themselves at risk of ignoring a valid government request such as a subpoena or court order.• Companies could elect to seek consent from all individuals whose information is collected in Europe, which in many circumstances is expensive, difficult and impractical (and is often a problem for employee data).In a press conference today, the European Commission stated that it perceives the ECJ’s ruling as confirming the Commission’s approach to the renegotiation of the Safe Harbor and that, in the meantime, transatlantic data flows can continue using other mechanisms available or exceptions provided for under EU law (e.g., performance of a contract, public interest, consent). The Commission intends to work closely with national DPAs and will issue “clear guidance” on how to deal with data transfer requests to the US in light of the ruling, to avoid a patchwork of contradictory decisions. While reiterating the importance of protecting personal data, the Commission set as a priority to ensure that data flows can continue, as they are the “backbone” of the EU economy.Just as with the whistleblowing hotlines a few years ago, the ECJ opinion has brought into clear view the conflict of laws between Europe and the U.S.. Companies may spend a tremendous amount of time and money in the next few weeks seeking an alternative that just does not exist.Waiting to see how this settles in the next few weeks may be the wisest course of action.

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ECJ Safe Harbor Opinion Has Implications for All Data Transfers Out of Europe

ECJ Safe Harbor Opinion Has Implications for All Data Transfers Out of Europe

Yesterday the European Court of Justice (ECJ) followed the core of the Opinion of the Advocate General (AG) in Schrems v. Data Protection Commissioner (Case No.

Operators of social media platforms and other websites typically manage their risks by imposing terms of use or terms of service for the sites. <a href="https://www.sociallyawareblog.com/2014/10/06/implementing-and-enforcing-online-terms-of-use" target="_blank" rel="noopener">As we previously wrote</a>, websites must implement such terms properly to ensure that they are enforceable. Specifically, users must be required to manifest acceptance of the terms in a manner that results in an enforceable contract. But what specifically constitutes such acceptance, and what steps should website operators take to memorialize and maintain the resulting contract? This article attempts to answer these practical questions.<h4>Use Boxes or Buttons to Require Affirmative Acceptance</h4>Website operators should avoid the cardinal sin in online contract formation: burying terms of use in a link at the bottom of a website and attempting to bind users to those terms based merely on their use of the website. Outside of some specific (and, for our purposes, not particularly relevant) circumstances, such approaches, often confusingly referred to as “browsewrap” agreements, will not result in a valid contract because there is no objective manifestation of assent. (Note, though, that even so-called browsewrap terms may be helpful in some circumstances, as we described in <a href="https://www.sociallyawareblog.com/2015/08/17/federal-district-court-browsewrap-terms-and-conditions-provide-notice-sufficient-to-defeat-false-advertising-class-action/" target="_blank" rel="noopener">this post</a>.)Moreover, even website terms presented through a “conspicuous” link may not be enforceable if users are not required to affirmatively accept them. For example, in <a href="http://cdn.ca9.uscourts.gov/datastore/opinions/2014/08/18/12-56628.pdf" target="_blank" rel="noopener">Nguyen v. Barnes & Noble, Inc.</a>, Barnes & Noble did include a relatively clear link to its website terms on its checkout page, but nothing required users to affirmatively indicate that they accepted the terms. The Ninth Circuit held, therefore, that Barnes & Noble could not enforce the arbitration provision contained in the terms. While the specific outcome in Barnes & Noble <a href="http://arbitrationnation.com/sirius-xm-faces-class-action-because-arbitration-agreement-provided-late-is-invalid/" target="_blank" rel="noopener">arguably is part of a Ninth Circuit trend </a>of declining to enforce arbitration clauses on the grounds that no contract had been formed, nothing in the opinion limits the Ninth Circuit’s holding to arbitration provisions. The case is an important cautionary tale for all website operators.To avoid the Barnes & Noble outcome, website operators should implement two key features when users first attempt to complete an interaction with the site, such as making a purchase, registering an account, or posting content: (1) present website terms conspicuously, and (2) require users to click a checkbox or an “I accept” button accompanying the terms. The gold-standard implementation is to display the full text of the website terms above or below that checkbox or button. If they fit on a single page, that is helpful, but an easy-to-use scroll box can work as well. Website operators taking the scroll box approach may consider requiring users to actually scroll through the terms before accepting them.Many website operators, however, choose not to present the terms themselves on the page where a user is required to indicate acceptance. Instead, they present a link to the terms alongside a checkbox or button. Courts have ratified this type of implementation as long as it is abundantly clear that the link contains the website terms and that checking a box or clicking a button indicates acceptance of those terms. This was essentially the implementation at issue in a 2012 case from the Southern District of New York, Fteja v. Facebook, Inc. Specifically, signing up for Facebook required users to click a button labeled “Sign Up,” and immediately below that button was the text, “By clicking Sign Up, you are indicating that you have read and agree to the Terms of Service.” The phrase “Terms of Service” was underlined and operated as a link to the terms. The court reasoned that whether the plaintiff read the terms of service was irrelevant because, for the plaintiff and others “to whom the internet is an indispensable part of daily life,” clicking on such a link “is the twenty-first century equivalent” of turning over a cruise ticket to read the terms printed on the back. As sure as vacationers know they can read the small print on their cruise tickets to find the terms they accept by embarking on the cruise, the plaintiff knew where he could read the terms of use he accepted by using Facebook. The parties formed an enforceable contract once the plaintiff clicked the “Sign Up” button.This reasoning, however, does not necessarily mean that an implementation like the one at issue in Fteja will always will result in an enforceable contract. Because it relied on the plaintiff’s admitted proficiency in using computers and the Internet, the court likened the “Terms of Service” link to the backside of a cruise ticket. This leaves room to argue for a different outcome when a website operator should expect that novice computer users will be among its visitors. The simple way to avoid that (perhaps far-fetched) argument is to expressly identify the hyperlink as a means to read the contract terms. That approach succeeded in <a href="https://law.justia.com/cases/federal/district-courts/ohio/ohndce/5:2009cv01547/159691/77/" target="_blank" rel="noopener">Snap-On Business Solutions v. O’Neil & Assocs., </a> where the website expressly instructed users, “[i]mmediately following this text is a green box with an arrow that users may click to view the entire EULA.”These cases illustrate how important it is to expressly connect users’ affirmative actions to the terms of use. In particular, the checkbox or button and accompanying text should clearly indicate that the user’s click signifies acceptance of the website terms. The terms should be presented in a clear, readable typeface and be printable, and the “call to action” text should be unambiguous—not susceptible to interpretation as anything other than acceptance of the website terms.Here are some examples:<ul><li>“By checking this box ¨, I agree to the ‘Terms of Use’ presented above on this page.”</li><li>“By clicking ‘I Accept’ immediately below, I agree to the ‘Terms of Service’ presented in the scroll box above.”</li><li>“Check this box ¨ to indicate that you accept the Terms of Use (click this link to read the Terms of Use).” (In this example, the website terms would be presented through a link, as in the Fteja case. The added instruction, “click this link to read the Terms of Use,” avoids any potential argument that a Fteja-type implementation only works where users can be assumed not to be novice computer users.)</li></ul><h4>Ensure You Can Prove Affirmative Acceptance</h4>Even website operators that properly implement website terms often neglect another important task: making sure they can prove that a particular user accepted the terms. One common approach—to present declarations from employees—is illustrated in <a href="https://casetext.com/case/moretti-v-hertz-corp-1" target="_blank" rel="noopener">Moretti v. Hertz Corp</a>., a 2014 case from the Northern District of California. The employees in that case affirmed via declarations that (1) a user could not have used the website without accepting the website terms, and (2) the terms included the relevant provision when the use took place.The approach in Moretti, however, has a potential weakness: it depends on declarants’ credibility and their personal memory of when the terms of service included certain provisions. Website operators can address that vulnerability by emailing a confirmation to users after they accept the website terms and then archiving copies of those messages. To limit the volume of email users receive, this confirmation could be included with other communications, such as messages confirming an order or registration. This approach has two benefits. First, the confirmation email provides further notice to the user of the website terms. Second, instead of (or in addition to) invoking employees’ memory of historical facts to establish which terms were in effect at the relevant time, employees can simply authenticate copies of the messages based on their knowledge of the messaging system.<h4>Provide Notice of Any Changes</h4>Some of the most difficult implementation issues arise when a website operator wishes to modify its terms. Website terms often purport to allow the operator to change the terms whenever it wishes, but unilateral modifications may not be enforceable if they’re not implemented properly because—like any other contract amendment—modification of website terms requires the agreement of both parties. Ideally, website operators should require users to expressly accept any changes or updates through a mechanism like the one used to obtain their acceptance of the website terms in the first place.Many website operators, however, are understandably reluctant to add friction to the user experience by repeating such legal formalities every time they modify their terms. In those cases, operators should consider providing users with clear advance notice of modifications. Such notice could specify when the changes will go into effect and state that continued use after that date will constitute acceptance of the changes. For example, in <a href="http://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?article=1656&context=historical" target="_blank" rel="noopener">Rodriguez v. Instagram</a>, Instagram announced a month in advance that it planned to modify its terms, and the plaintiff continued to use the site after the effective date of the change. On those facts, the trial court found that the plaintiff agreed to the modified terms by continuing to use the service. While Instagram and <a href="http://blog.ericgoldman.org/archives/2015/01/safeway-cant-unilaterally-modify-online-terms-without-notice.htm" target="_blank" rel="noopener">other cases</a> have indicated that unilateral changes require, at the very least, advance notice, other courts may be less willing to enforce unilateral modifications without express acceptance by the user, especially where the factual issue of notice is contested. Obtaining express acceptance remains the safest approach.Following the above guidelines will increase the likelihood that courts will view website terms—and the important risk mitigation provisions they contain, such as disclaimers, limitations of liability and dispute resolution provisions—as enforceable contracts.

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

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Three Steps to Help Ensure the Enforceability of Your Website’s Terms of Use

Three Steps to Help Ensure the Enforceability of Your Website’s Terms of Use

Operators of social media platforms and other websites typically manage their risks by imposing terms of use or terms of service for the sites. As we previously

Vloggers have become the reality stars of our times. For an increasing number of social media users, what was once a hobby is now a lucrative career. You may be surprised to learn that Felix Kjellberg (aka “PewDiePie”), a 25-year-old Swedish comedian and the world’s most popular YouTube star, is reported to have earned $8.5 million in 2014.The UK has its own vlogger superstars in the form of Zoella and Alfie Deyes. Together, this power couple of social media has amassed 12 million YouTube subscribers, 6.8 million Instagram followers and almost 6 million Twitter followers. Zoe Suggs (aka “Zoella”), 25, started vlogging in 2009 and has since become a brand in fashion and beauty marketing, publishing a novel and creating a line of products. Alfie, 21, started his Pointless vlog when he was 15 and has since published a series of books. It was even announced earlier this year that tourists will soon be able to see waxworks of Zoella and Alfie at London’s Madame Tussauds. But Zoella and Alfie are not alone; there is now a whole generation of vloggers rivalling film and sports stars in the popularity ranks. Indeed, we now even have a host of social media talent agencies formed to help propel vloggers to superstardom.Vloggers are particularly popular with young people who enjoy the more intimate connection they can have with these approachable idols. Therefore, brands who want to target a young demographic are increasingly keen to work with vloggers. This collaboration typically involves brands paying vloggers to feature in “advertorial vlogs,” i.e., videos created in the usual style of the vlogger, but with the content controlled by the brand.Now, of course, there is nothing inherently wrong with there being a commercial relationship between a brand and a vlogger from a legal perspective. However, particularly where you have the influence of celebrity, plus an impressionable audience, vloggers and brands need to be very careful that they don’t fall foul of consumer protection rules that are in place to protect consumers from unfair advertising practices. In August 2015, the UK advertising regulator issued new guidance to help vloggers and brands be responsible and stay on the right side of the law. In this blog post, we will identify the key issues raised by the guidance. We will also provide an overview of some of the other key legal issues that brands need to be aware of when using social media for marketing and advertising in the UK.<h4>Vlogs</h4><a href="http://www.legislation.gov.uk/ukdsi/2008/9780110811574/contents" target="_blank" rel="noopener">The Consumer Protection from Unfair Trading Regulations 2008</a> (“CPRs”) prohibit certain unfair commercial practices. These include using editorial content in the media to promote a product where a trader has paid for the promotion without making that clear (advertorial).The<a href="https://www.asa.org.uk/codes-and-rulings/advertising-codes/non-broadcast-code.html" target="_blank" rel="noopener"> Committee of Advertising Practice Code</a> (the “CAP Code”) acts as the rule book for non-broadcast advertisements in the UK and requires that advertising must be legal, decent, honest and truthful. The CAP Code was extended to cover social media in 2011. The Cap Code is enforced by the <a href="https://www.asa.org.uk/Rulings/Adjudications/2015/5/Procter-and-Gamble-(Health-and-Beauty-Care)-Ltd/SHP_ADJ_288449.aspx" target="_blank" rel="noopener">Advertising Standards Authority</a> (“ASA”), the UK regulator responsible for advertising content in the UK. The ASA has the power to remove or have amended any ads that breach the CAP Code.Rule 2.1 of the CAP Code states that marketing communications must be obviously identifiable as such. Rule 2.4 states that marketers and publishers must make clear that advertorials are marketing communications, e.g., by labelling them “advertisement feature.” These rules apply to marketing communications on vlogs in the same way as they would to marketing communications that appear on blogs or other online sites. But as the CAP Executive noted last year, a number of marketers have “fallen foul of the ASA by blurring the line, intentionally or not, between independent editorial content written about a product and advertising copy.”In November 2014, the ASA’s ruling against Mondelez provided a clear example of a brand failing to comply with the CAP Code. Mondelez had engaged five celebrity vloggers to promote its Oreo cookies by participating in a race to lick cream off a cookie as quickly as possible. The channels featuring the vlogs typically contained non-promotional content, and the vlogs failed to clearly indicate the commercial relationship between Mondelez and the vloggers. The reference to “Thanks to Oreo for making this video possible” might indicate that Oreo had been involved in the process, but it did not make clear that the advertiser had paid for and had editorial control over the videos. As a result, the advertorials were banned.In another high-profile case, in May 2015, a YouTube video providing makeup tutorials featuring the popular vlogger Ruth Crilly, who has 300,000 subscribers on YouTube, was banned by the ASA for failing to clearly identify itself as marketing material. The video appeared on the “Beauty Recommended” YouTube channel, which is operated by Procter & Gamble, with the intention of marketing its Max Factor range of products. The ASA stated that the channel page provided “no indication” that it was a Max Factor marketing tool, and emphasized that “it wasn’t clear until a viewer had selected and opened the video that text, embedded in the video, referred to Procter & Gamble….We consider that viewers should have been aware of the commercial nature of the content prior to engagement.”<h4>Guidance</h4>In August 2015, the CAP Code Executive published guidance to help vloggers and brands better understand their obligations under the advertising rules. While the guidance is not binding, it’s a helpful statement of the rules as they apply to vlogs.Advertorial. Where a brand collaborates with a vlogger on a video that is produced by the brand and published on the brand’s website or social media page, this is very likely to be a marketing communication—but it wouldn’t be an advertorial. However, where a vlog is made in the usual style of the vlogger, but the content of the vlog is controlled by the brand and the vlogger has been paid (not necessarily with money) for the vlog, this would be an advertorial. Because the extent of the brand involvement may not be obvious to the viewer, this needs to be made explicit upfront so that viewers are aware that the video is an ad before engaging. Labels such as “ad,” “ad feature,” “advertorial,” or similar are likely to be acceptable, whereas labels such as “sponsored by,” “supported by” and “thanks to X for making this possible” should be avoided, as these would not make it sufficiently clear that the brand had control over the content of the vlog. Viewers should be aware that they are selecting an ad to view before they watch it so that they can make an informed choice. Finding out that something is an ad after having selected it, at the end of a video or halfway through, is not sufficient.Commercial breaks/product placement. In terms of commercial breaks or product placement within a vlog, it needs to be clear when the ad or product placement starts. This could be via onscreen text, a sign, logo or the vlogger explaining that they have been paid to talk about a particular item by the brand.Vlogger-promotion. If the sole content of a vlog is a promotion of the vlogger’s own merchandise, this would not be considered an advertorial. Rather, it would be a marketing communication. The video title should make clear that the video is promoting the vlogger’s products, but it’s unlikely that the vlog itself will need labelling as an ad if it’s clear from the context that it’s a marketing communication.Sponsorship. Where a brand has sponsored a vlog, but the brand has no control over the vlog, this would not be considered an ad and would not be caught by the CAP Code. However, to ensure compliance with the CPRs, the vlogger should give a nod to the sponsor in order to disclose the nature of the commercial relationship.Free Items. Vloggers may be sent free items by a brand. Where there is no condition attached to the item by the brand and the vlogger can choose whether or not to cover the item in a vlog, this would not be an ad caught by the CAP Code. In addition, where the brand provides the vlogger with free products on the condition that they are reviewed independent of any brand input, then, as the brand retains no control over the vlog, the video would not have to be labelled as an advertorial. However, in such circumstances, the vlogger should disclose to consumers that the vlogger has an incentive to talk about the product, along with the nature of the incentive, to ensure compliance with the CPRs.<h4>Other Social Media Marketing</h4>Vlogging isn’t the only aspect of social media marketing that creates compliance challenges, of course. There are other issues that brands need to be aware of when advertising and marketing using social media in the UK. We have outlined some of these below. For issues specific to the UK financial services sector, please see our previous blog post: <a href="https://www.sociallyawareblog.com/2015/03/26/uks-financial-services-regulator-no-hashtags-in-financial-promotions/" target="_blank" rel="noopener">UK’s Financial Services Regulator: No Hashtags in Financial Promotions</a>.Native Advertising (written advertorial). A native ad is advertising that resembles editorial content. Native ads are a popular form of content marketing, but again raise concerns that consumers may not be aware that the content is advertising in breach of the CPRs and Cap Code. <a href="http://www.iabuk.net/resources/standards-and-guidelines/content-and-native-disclosure-guidelines" target="_blank" rel="noopener">Guidance</a> issued in February 2015 by <a href="http://www.iabuk.net/resources/standards-and-guidelines/content-and-native-disclosure-guidelines" target="_blank" rel="noopener">IAB</a> (the UK trade association for digital advertising) advised advertisers to provide consumers with prominently visible visual cues to enable them to understand, immediately, that they are engaging with marketing content that has been compiled by a third party in a native ad format and is not editorially independent. The guidance suggests clear brand logos and the use of different design formatting for native ads. It also advises the publisher or provider of the native ad format to use a reasonably visible label that makes clear that a commercial arrangement is in place.Employee Endorsements. Companies are keen to encourage their employees to use social media and become advocates for the company. However, companies must be careful; if an employee chooses to discuss his or her employer’s brand favorably on social media, then this is likely to be construed as an advert under the CAP Code, even where the employee is acting independently and not at the request of his or her employer. An employee endorsement that is not transparent also runs the risk of breaching the CPRs. Therefore, employees must make clear that they are affiliated with their employer when making any company endorsements on social media. Organizations should also provide employees with clear social media policies and training to avoid any incident of inadvertent advertising.Ads via Twitter and Celebrity Endorsements. As mentioned above, the CPRs and CAP Code require users to be aware that they are viewing an advert. In terms of Twitter, this means that promotional tweets should be accompanied by the hashtag #spon or #ad. This is particularly the case where the advert may not be immediately apparent as a promotional tweet, e.g., where it is in the form of a celebrity endorsement. As with promotions using vloggers, companies are increasingly keen to use celebrities in connection with promotions in order to increase their brand awareness within that celebrity’s group of followers.In March 2012, an advertising campaign by Mars involved reality star Katie Price tweeting about the Eurozone crisis, and soccer player Rio Ferdinand engaging his followers in a debate about knitting. The campaign involved four teaser tweets by each celebrity to focus attention on their Twitter profile (but with no marketing content), culminating with a final tweet that was an image of the celebrity with a Snickers chocolate bar and the line “you’re not you when you’re hungry @snickersUK #hungry#spon.” While the final tweet was clearly labelled as an advert, the ASA ruled that the first four tweets only became marketing communications at the point the fifth and final tweet was sent (as the first four tweets contained no marketing references). As a result, the ASA ruled that the campaign did not breach advertising standards as the fifth tweet (and as such, the entire campaign) was clearly identifiable as an advert.However, Nike was less successful in June 2012. Soccer players Wayne Rooney and Jack Wilshere tweeted “My resolution – to start the year as a champion, and to finish it as a champion… #makeitcount.gonike.me/makeitcount.” While the ASA agreed that the tweets were obviously marketing communications, the reference to the Nike brand was not sufficiently prominent. The tweets also lacked #spon or #ad to signify advertising. As it was not sufficiently clear to all readers that the tweets were part of a marketing campaign, the advertisement was banned.User-Generated Content. Companies also need to be wary when using user-generated content when promoting their brand. For example, companies may be deemed to be advertising if they: (i) provide a link to a user blog that includes positive comments, (ii) re-tweet positive tweets from users, or (iii) allow users to post comments on the company website. To ensure that such content is responsible, accurate and not misleading, harmful or offensive, companies should monitor user-generated content to ensure that the content is appropriate for the likely audience and preserve documentary evidence to substantiate any claims.Advergames. Advergames are online video games that are created in order to promote a brand, product or organization by immersing a marketing message within the game. In May 2012, the ASA published guidance that made clear that advergames will be considered advertising and are subject to the CAP Code. For further discussion on advergames, please see our previous blog post: <a href="https://www.sociallyawareblog.com/2014/12/18/what-are-the-rules-of-the-advergame/" target="_blank" rel="noopener">What Are the Rules of the Advergame in the UK?</a><h4>Conclusion</h4>The key message for organizations who want to use social media in their marketing campaigns is to treat consumers fairly and to be upfront and transparent. But good practice isn’t just about legal compliance, it will also help maintain consumers’ respect for and trust in your brand. If your social media campaign hits the headlines, you want it to be for all of the right reasons.

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How UK Brands That Use Vlogger Endorsements & Social Media for Marketing Can Stay on the Right Side of the Law

How UK Brands That Use Vlogger Endorsements & Social Media for Marketing Can Stay on the Right Side of the Law

Vloggers have become the reality stars of our times. For an increasing number of social media users, what was once a hobby is now a lucrative career. You may be

Tale of the tape. The Video Privacy Protection Act (VPPA), which requires video service providers to destroy personally identifiable information after a specified time, doesn’t provide a private right of action for plaintiffs whose information was retained beyond that period. So held the U.S. Court of Appeals for the Ninth Circuit in <a href="http://cdn.ca9.uscourts.gov/datastore/opinions/2015/09/04/12-17391.pdf" target="_blank" rel="noopener">Rodriguez v. Sony</a>, a case in which the plaintiff, Daniel Rodriguez, claimed that two Sony companies violated the act by retaining, beyond the act’s statutory limits, information relating to movies he had rented and purchased. Citing prior decisions by the <a href="https://casetext.com/case/daniel-v-cantrell-2" target="_blank" rel="noopener">Sixth Circuit</a> and the <a href="http://www.leagle.com/decision/In%20FCO%2020120306137.xml/STERK%20v.%20REDBOX%20AUTOMATED%20RETAIL,%20LLC" target="_blank" rel="noopener">Seventh Circuit,</a> the court in Rodriguez held that the VPPA provides a private right of action only for prohibited disclosure of personal information, not for prohibited retention of personal information. Rodriguez did also claim that Sony had violated the disclosure provisions of the VPPA because the company “shared, sold, and/or transferred” his personal information to Sony Network after Sony Network “took over the [Playstation Network].” But the Ninth Circuit upheld the dismissal of this claim as well, holding that it fell within the VPPA’s exemption for disclosures “incident to the ordinary course of business.” The Rodriguez v. Sony opinion is the second time in two months that the Ninth Circuit dismissed a plaintiff’s attempt to recover under the VPPA. The <a href="http://cdn.ca9.uscourts.gov/datastore/opinions/2015/07/31/12-17045.pdf" target="_blank" rel="noopener">last case</a> affirmed a district court’s conclusion that Netflix did not violate the act by permitting certain disclosures about subscribers’ viewing history to subscribers’ family, friends and guests.Discipline and punish. The Illinois Supreme Court has suspended for three years a Chicago attorney who wrote blog posts that, according to a <a href="http://lawprofessors.typepad.com/legal_profession/2015/09/an-attorney-who-blogged-about-probate-court-was-suspended-f-or-three-years-and-unt-il-further-order-by-the-illinois-supreme-c.html" target="_blank" rel="noopener">report</a> by the Illinois attorney disciplinary board that originally reviewed the matter in 2014, impugned “the integrity of certain judges, guardians ad litem and the lawyers involved in a case in the Probate Court of Cook County.” The lawyer/blogger, JoAnne Marie Denison, wrote the posts that landed her in hot water following her representation of a 90-year-old woman in guardianship proceedings. In 2014, the board <a href="http://www.law360.com/articles/600534/atty-blogger-faces-suspension-for-calling-court-corrupt" target="_blank" rel="noopener">concluded</a> that Denison—whose posts <a href="http://www.law360.com/articles/600534/atty-blogger-faces-suspension-for-calling-court-corrupt" target="_blank" rel="noopener">referenced</a> a “feeding frenzy” of lawyers, a “classic case of corruption” and a court “being spoonfed BS law by atty miscreants”—had violated several rules, including one that prohibits lawyers from making “a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory officer or public legal officer.” The board nevertheless didn’t conclude that Denison’s actions warranted disbarment, <a href="http://www.law360.com/articles/600534/atty-blogger-faces-suspension-for-calling-court-corrupt" target="_blank" rel="noopener">writing</a> that she “genuinely, though unreasonably, believed something was wrong with the proceedings in the … case,” and did not seem to be motivated by self-interest. Arguing that the decision violated her First Amendment rights, Denison then appealed to a review board, which upheld her suspension. The Illinois Supreme Court finally cemented Denison’s suspension on September 21, 2015.Why can’t we be friends? An Australian tribunal charged with employee dispute resolution cited a Tasmanian sales administrator’s decision to unfriend her colleague on Facebook in its finding that the sales administrator bullied her colleague, a real estate agent, in the workplace. The deputy president of the tribunal, Australia’s <a href="https://en.wikipedia.org/wiki/Fair_Work_Commission" target="_blank" rel="noopener">Fair Work Commission</a>, said the act of unfriending was exemplary of a “lack of emotional maturity.” Legal experts interviewed by the Australian media <a href="http://www.abc.net.au/news/2015-09-25/fair-work-commission-finds-unfriending-on-facebook-can-bullying/6805484" target="_blank" rel="noopener">emphasized</a> that the sales administrator’s alienation of her colleague on Facebook was just one of many incidents of hostile behavior and that unfriending a colleague on Facebook does not, on its own, amount to workplace bullying. But they also said the decision was illustrative of the need for companies to have clear social media policies.

Status Updates: Court nixes VPPA claim; lawyer suspended over blog posts; Facebook ‘unfriending’ cited in bullying decision

Tale of the tape. The Video Privacy Protection Act (VPPA), which requires video service providers to destroy personally identifiable information after a specifi

Status Updates: Court nixes VPPA claim; lawyer suspended over blog posts; Facebook ‘unfriending’ cited in bullying decision

In December 2014, we noted that the Federal Trade Commission’s (FTC) settlement with advertising firm Deutsch LA, Inc. was a clear signal to companies that advertise through social media that they need to comply with the disclosure requirements of Section 5 of the FTC Act. On September 2, 2015, the FTC announced <a href="https://www.ftc.gov/news-events/press-releases/2015/09/xbox-one-promoter-settles-ftc-charges-it-deceived-consumers" target="_blank" rel="noopener">a settlement</a> along the same lines with Machinima, Inc., a company promoting the Xbox One system. This new action indicates that the FTC is serious about enforcing compliance in this space, so companies need to make sure that their advertising and marketing partners understand their obligations under Section 5.A Quick Refresher on Online Advertising Disclosure RequirementsAs we explained in our previous alert, the FTC’s <a href="https://www.ftc.gov/sites/default/files/documents/federal_register_notices/guides-concerning-use-endorsements-and-testimonials-advertising-16-cfr-part-255/091015guidesconcerningtestimonials.pdf" target="_blank" rel="noopener">Endorsement Guides</a> describe how advertisers using endorsements can avoid liability under Section 5 for unfair or deceptive acts or practices. Simply put, a customer endorsement must be from an actual, bona fide user of the product or service and, if there is any material connection between the endorser and the advertiser that consumers would not reasonably expect but that would affect the weight given to the endorsement—such as payment or an employment relationship—then that connection must be clearly and conspicuously disclosed.According to the <a href="https://www.ftc.gov/system/files/documents/cases/150902machinima-cmpt.pdf" target="_blank" rel="noopener">complaint</a> in In re Machinima, Machinima paid video bloggers (“influencers”) to promote Microsoft’s Xbox One system by producing and uploading to YouTube videos of themselves playing Xbox One games. Machinima did not require any disclosure of the compensation the influencers received, and many videos lacked any such disclosure. The FTC alleged that the payments would not be reasonably expected by YouTube viewers, such that the failure to disclose them was deceptive in violation of Section 5. In light of the Deutsch LA case, which dealt with endorsements on Twitter that did not include proper disclosures, In re Machinima seems uncontroversial. But what makes the case interesting is how close Microsoft came to being swept up in it.Microsoft Escapes Liability, NarrowlyThe FTC also issued a <a href="https://www.ftc.gov/system/files/documents/closing_letters/nid/150902machinima_letter.pdf" target="_blank" rel="noopener">closing letter</a> reflecting that it had investigated Microsoft, and Microsoft’s advertising agency Starcom, in relation to influencers’ videos. (Starcom managed the relationship with Machinima.) Even though the FTC did not ultimately take action against Microsoft (or Starcom), the closing letter is significant because it makes clear the FTC’s position that a company whose products are promoted bears responsibility for the actions of its ad agencies—as well as the actions of those engaged by its ad agencies.According to the closing letter, Microsoft avoided an enforcement action because it had a “robust” compliance program in place that included specific guidance relating to the FTC’s Endorsement Guides and because Microsoft made training relating to the Endorsement Guides available to employees, vendors and personnel at Starcom. Furthermore, Microsoft and Starcom adopted additional safeguards regarding sponsored endorsements and took swift action to require Machinima to insert disclosures into the offending videos.Given the increased reliance of advertisers on social media campaigns, the Machinima case provides both a clear warning and clear guidance to companies on how to minimize the risk of a Section 5 enforcement action. Not only must notice be provided of any paid endorsements, regardless of the medium in which they appear, but advertisers should also seriously consider having in place specific policies and procedures to address the FTC’s Endorsement Guides—as well as to ensure that their ad agencies and other involved parties comply with them.

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Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance c

Julie O'Neill

Clients seek out Julie because of her practical advice on cutting-edge issues at the intersection of privacy and consumer protection laws. She provides clients with practical solutions to compliance challenges around a wide variety of both online and offline privacy issues, including tracking, interest-based advertising, geo-targeting and other mobile tracking, personalization, and cross-device tracking. Recognized in The Legal 500 US 2014, 2016, 2019, and 2020 and Chambers USA 2021 for her exceptional legal work, her clients praise her saying, “She is really good at giving practical, targeted advice and taking stock of what the risk profile of the client is, so that the advice is holistic.” (Chambers USA 2021).

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FTC Continues Enforcing Ad Disclosure Obligations in New Media and Issues a Warning to Advertisers

FTC Continues Enforcing Ad Disclosure Obligations in New Media and Issues a Warning to Advertisers

In December 2014, we noted that the Federal Trade Commission’s (FTC) settlement with advertising firm Deutsch LA, Inc. was a clear signal to companies that adve

The U.S. District Court for the District of New Hampshire recently <a href="http://www.nhd.uscourts.gov/sites/default/files/Opinions/15/15NH154P.pdf" target="_blank" rel="noopener">struck down</a> on First Amendment grounds a 2014 amendment to <a href="http://www.gencourt.state.nh.us/rsa/html/LXIII/659/659-35.htm" target="_blank" rel="noopener">New Hampshire Revised Statute 659:35</a> that made it illegal for New Hampshire voters to post pictures of their completed ballots to social media. While several states have laws that disallow ballot sharing, RSA 659:35 was the first “to explicitly ban voters from sharing their marked ballots on social media.”The case, <a href="https://dockets.justia.com/docket/new-hampshire/nhdce/1:2014cv00489/41517" target="_blank" rel="noopener">Rideout v. Gardner</a>, was <a href="http://aclu-nh.org/nhclu-files-federal-lawsuit-against-state-law-banning-pure-political-speech-on-the-internet/" target="_blank" rel="noopener">filed by the New Hampshire Civil Liberties Union</a> on behalf of three voters who were being investigated by the New Hampshire Attorney General’s Office for violating the law banning ballot selfies during the September 2014 Republican primary elections.The court first determined that RSA 659:35 was a content-based restriction on speech because it necessarily required regulators to “examine the content of the speech to determine whether it includes impermissible subject matter”—i.e., photographs of completed ballots.The court then held that the statute could not meet the strict scrutiny standard that applies to content-based speech, “which requires the Government to prove that the restriction furthers a compelling interest and is narrowly tailored to achieve that interest.”Paraphrasing a <a href="https://www.law.cornell.edu/supct/html/08-1448.ZS.html" target="_blank" rel="noopener">2011 Supreme Court case</a>, the Rideout court noted that, “[f]or an interest to be sufficiently compelling, the state must demonstrate that it addresses an actual problem.” The state had argued that the law was needed to prevent vote buying and voter intimidation, but the court was not convinced. In fact, the plaintiffs had produced evidence that vote buying had not been the subject of a single prosecution or complaint in New Hampshire since 1976.The court also noted that the state had “failed to identify a single instance anywhere in the United States in which a credible claim has been made that digital or photographic images of completed ballots have been used to facilitate vote buying or voter coercion.”Finally the court held that the law was not sufficiently narrowly tailored, because the “few who might be drawn into efforts to buy or coerce their votes are highly unlikely to broadcast their intentions via social media.” Thus, investigations for violation of RSA 659:35 “will naturally tend to focus on the low-hanging fruit of innocent voters who simply want the world to know how they have voted for entirely legitimate reasons” and will likely “punish only the innocent while leaving actual participants in vote buying and voter coercion schemes unscathed.”Moreover, the state had an obvious, less-restrictive alternative: “[I]t can simply make it unlawful to use an image of a completed ballot in connection with vote buying and voter coercion schemes.”

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Federal District Court Strikes Down Law That Bans Ballot Selfies

Federal District Court Strikes Down Law That Bans Ballot Selfies

The U.S. District Court for the District of New Hampshire recently struck down on First Amendment grounds a 2014 amendment to New Hampshire Revised Statute 659: