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

Social Links: If the Suit Fits

Social Links: Age Verification, X Appeal, and the Great White North

Social Links: Fake Reviews, Real Rulings, and an Epic Fail

Lawrence W. Gallick on Toth v. Everly Well, Inc.

Social Links: Going Back to Cali

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Here at Socially Aware, we <a href="/topics/social-links-social-media-account-ownership-once-again-in-the-spotlight" target="_self">have been discussing</a> issues around ownership of social media accounts since the beginning of social media. Just last July, we reported on how a bankruptcy court in Florida forced the founder and former CEO of Bang Energy to delete disparaging comments from his Instagram account and ultimately <a href="https://caselaw.findlaw.com/court/us-ban-crt-s-d-flo-for-lau-div/2289548.html" target="_blank">ruled</a> that the company owned the Instagram, TikTok, and X (formerly Twitter) accounts at issue. Prior to the Bang case, a number of other cases addressed these issues, with varying results, which is unsurprising given the varying facts around creation and use of social media accounts by businesses and business professionals. See some of our other <a href="/topics/which-side-are-you-on-employers-and-employees-battle-over-ownership-of-social-media-accounts" target="_self">coverage of social media ownership litigation</a>.Today, we are looking at a recent Second Circuit case, <a href="https://law.justia.com/cases/federal/appellate-courts/ca2/21-2535/21-2535-2024-01-17.html" target="_blank" dir="ltr">JLM Couture, Inc. v. Hayley Paige Gutman</a>, where a fashion designer and her former employer wrestled over ownership of Instagram and Pinterest accounts that the fashion designer created and used for both business and personal brand purposes.BackgroundIn July 2011, JLM Couture, Inc. engaged Hayley Paige Gutman to design a line of bridal wear. The employment contract included several restrictions on Gutman, including that: (a) Gutman would not use her name in commerce once JLM registered it as a trademark; (b) certain broad categories of Gutman’s work would be JLM’s property as works for hire; and (c) she would abide by certain noncompete, nonsolicit, and nondisclosure obligations during the term of the contract and for five years thereafter. JLM and Gutman agreed to extend the contract through August 1, 2022 but, following further negotiations in 2019, failed to agree on any further extensions. Following the breakdown in negotiations, Gutman changed the passwords to her Instagram and Pinterest accounts, refused to give JLM access to the accounts, and notified JLM that she would no longer post JLM-related content to the accounts. JLM then sued Gutman for, among other things, breach of contract, conversion, and trespass to chattels based on Gutman’s taking control of the accounts.Gutman personally created both accounts in 2011 and 2012, using her own name as a handle and with her personal contact information. JLM did not require Gutman to open the accounts, although JLM argued that she had created them within the scope of her employment. The district court agreed that Gutman created the accounts to showcase JLM’s products, which she featured in her earliest posts, interspersed with posts of a more personal nature. Over time, the accounts became more JLM-focused, featuring product pictures and JLM event information. In addition, the accounts’ messaging features were used to respond to sales inquiries. Notably, other JLM employees had access to manage the accounts.Prior to this appeal, the case had already gone through a series of decisions and appeals, resulting in a preliminary injunction that, among other things, gave JLM control of the accounts and enjoined Gutman from competing with JLM until the end of the contract term in 2022. When Gutman posted teasers to the Instagram account about her new bridal brand, the district court held her in contempt, ordered her not to post any “similar content,” and assessed a $5,000/day penalty while she remained out of compliance. In this appeal, the Second Circuit reviewed that contempt order.Second Circuit DecisionGutman argued, and the Second Circuit agreed, that the district court was in error to give JLM control of the accounts. The district court had used a six-factor test to determine the proper owner of a social media account, as follows:<ol><li dir="ltr">whether the account handle reflects the business or entity name;</li><li dir="ltr">how the account describes itself;</li><li dir="ltr">whether the account was promoted on the entity’s 	advertisements or publicity materials;</li><li dir="ltr">whether the account includes links to other internet platforms of the entity;</li><li dir="ltr">for what purpose the account was used, including whether it was tied to promotional or mission-oriented activities of the entity; and</li><li dir="ltr">whether employees or members of the entity had access to the account and participated in its management.</li></ol>Based on this analysis, the district court determined that JLM had a “clear likelihood” of success on demonstrating that it owned the accounts or, even if Gutman had title to the accounts, that JLM had a “vastly superior” right to control the accounts.The Second Circuit concluded that the district court’s use of the six-factor test was an error. Despite social media being a relatively new technology in the eyes of the law, the Second Circuit determined that there was no reason here to deviate from traditional principles of property law. The Second Circuit noted that the district court’s failure to start its analysis by looking at who owned the accounts at their creation was one problematic result of this error. The court went all the way back to a case that most law students read in their first-year property law class, <a href="https://history.nycourts.gov/case/pierson-v-post/" target="_blank" dir="ltr">Pierson v. Post</a> (a case from 1805 deciding the ownership of a fox), among other venerable precedents, to spell out the principle that the proper ownership analysis consists of determining (a) who owned the property originally; and (b) whether those rights were later transferred to someone else.The Second Circuit then went on to hold that Gutman clearly owned the accounts at their creation if she originally created them using her personal information and for her personal use (a factual issue for the district court to decide on remand). If Gutman did own the accounts at their creation, the next question is whether JLM later acquired the accounts by operation of the contract. The Second Circuit makes clear that this question does not turn on whether Gutman assigned specific content to JLM under the contract, or whether others were permitted to assist in managing the accounts. In a rebuke to the district court, the Second Circuit said:Determining ownership by reference to such principles would promote transfer by surprise and complicate contractual arrangements under which an account owner might agree to advertise another’s goods on his or her platform.The contract allocated ownership of the following materials to JLM as works for hire: “designs, drawings, notes, patterns, sketches, prototypes, samples, improvements to existing works, and any other works conceived of or developed by [Gutman] in connection with her employment with [JLM] involving bridal clothing, bridal accessories and related bridal or wedding items.” (Emphasis added.) The district court interpreted the accounts to be “other works” under this language, and therefore held that Gutman had transferred ownership of the accounts to JLM.The Second Circuit rejected the district court’s analysis based on ejusdem generis, a general principle of contract construction that requires that general terms at the end of a list include only objects similar to the specific items in the list. The Second Circuit noted that the listed items were all creative materials that Gutman might produce in her work as a designer, consisting primarily of copyrightable subject matter. A social media account, in contrast, does not share any of those attributes. Therefore, the Second Circuit instructed the district court to reassess the ownership question using the proper ownership test and the foregoing principles, with the strong inference that it might then conclude that Gutman is the legal owner of the accounts.ConclusionIn Gutman, the Second Circuit endorsed a test of social media account ownership that is perhaps not as simple as it seems. In broad terms, the Gutman analysis requires us to look at who owned the account when it was created, and then see if it was later transferred or assigned to someone else. Given the court’s reference to determination of initial ownership by the circumstances of its creation, including whether it was created for personal use, this analysis is inherently fact-driven and will likely not have a clean answer in a world where influencers tend to leverage their personal lives for business gains.Notably, the Second Circuit’s approach implicitly accepts that a social media account is property in the first instance, a proposition that prior courts have not always been sure about, even though they generally accept the principle as a matter of convenience. For example, in <a href="https://caselaw.findlaw.com/court/us-ban-crt-s-d-flo-for-lau-div/2289548.html">In re: Vital Pharmaceutical</a> (the Florida bankruptcy case mentioned above), the bankruptcy court noted:<blockquote dir="ltr">Describing a user’s interest in a social media account is difficult. With respect to some sites, such as TikTok and Twitter, a social media user’s right to use the platform is defined as a “license.” But, in some cases, such as Instagram, that right is not defined at all. For ease of reference, the Court will refer to “ownership of the rights to social media accounts” to encompass whatever rights a user has—whether it be a license or otherwise—to access and use a social media account.</blockquote>Despite these issues, Gutman may enable other courts to streamline their analysis of these issues. While it is not necessarily easy to determine whether an account was owned by an employee or a company at creation, knowing that a court will ultimately rule on ownership of the account according to traditional principles of property law should enable both employees and companies to enter into employment contracts that make ownership of social media accounts more predictable, by, for example, expressly assigning social media accounts used for any company business to the company (note that it would be fairly simple for a company to include language in its employment contract eliminating the ejusdem generis issue described above), implementing strict procedures for creation of such social media accounts, and/or requiring the employee to promise to use company-related social media accounts only in certain ways.

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.

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

Here at Socially Aware, we have been discussing issues around ownership of social media accounts since the beginning of social media. 

Owned: Second Circuit Holds That Traditional Principles of Property Law Apply to Social Media Accounts

Welcome to 2024 from Socially Aware! We’ve been tracking developments in the law and business of social media and related topics from end of last year into the beginning of the new year.Here are some of the trending developments that have caught our attention.Michael Cohen, Donald Trump’s former lawyer, used Google’s AI tool, Bard, to <a href="https://www.axios.com/2023/12/29/michael-cohen-ai-fake-legal-cases" target="_blank">find cases in support of his release from post-prison supervision</a>. Cohen’s lawyer, David Schwartz, neglected to verify the cases before including them in his brief and, as it turned out, some of the cases were fake. The use of AI in legal research has judges and courts on alert, as the legal system grapples with governing, and in some cases banning, AI for such purposes.The U.S. Copyright Office <a href="https://www.govinfo.gov/content/pkg/FR-2024-01-03/pdf/2023-28724.pdf" target="_blank">plans to implement a “group registration option”</a> that would allow online publishers to register their news websites, most of which are updated frequently, as collective works with a deposit of identifying material, instead of the entire website. Typically, copyright registration requires the publisher to submit two complete copies of the “best edition of the work,” but this is often not practical for constantly changing online news sites.The LGBTQ+ dating app Grindr <a href="https://www.bloomberglaw.com/public/desktop/document/PlaintiffJOHNDOEvGRINDRINCetalDefendantsNo223CV02093ODWPDX2023BL4?doc_id=X310U1B0000N" target="_blank">avoided a lawsuit brought against it by an underaged user</a> who claimed that, due to a design defect, the app did not verify his age and connected him with four men who sexually abused him. U.S. District Judge Otis Wright in the Central District of California <a href="https://docs.justia.com/cases/federal/district-courts/california/cacdce/2:2023cv02093/878953/45" target="_blank">dismissed the case</a>, holding that Section 230 barred the plaintiff’s claims. The court rejected the plaintiff’s invocation of the Ninth Circuit’s decision in <a href="https://www.sociallyawareblog.com/topics/ninth-circuits-snap-decision-limits-section-230-immunity" target="_blank">Lemmon v. Snap</a>, which held that Section 230 did not apply to negligent design claims that did not treat the defendant website as a “publisher or speaker” of “information provided by another information content provider.” Unlike in Lemmon, the court held, the plaintiff’s claims here were, in fact, based on Grindr’s publication of third-party content, namely geolocation data and user profiles. The court also rejected the plaintiff’s argument that <a href="https://www.sociallyawareblog.com/topics/ninth-circuit-interprets-fosta-restriction-on-section-230-narrowly" target="_blank">FOSTA’s sex trafficking exception to Section 230</a> should apply, noting that plaintiff did not allege that Grindr’s own conduct violated the underlying sex trafficking laws and that, even if Grindr “turned a blind eye” to sex trafficking on its app, as the plaintiff alleged, that was not sufficient to come within the FOSTA exception to the Section 230 safe harbor.The <a href="https://www.billboard.com/business/legal/no-ai-fraud-act-congress-federal-law-explained-1235578930/" target="_blank">No Artificial Intelligence Fake Replicas and Unauthorized Duplications Act</a>, or No AI FRAUD Act, is a proposed bill from the House of Representatives that would create a new federal framework to regulate use of AI technology to clone people’s voices and likenesses. Introduced by Representatives María Elvira Salazar (R, Florida) and Madeleine Dean (D, Pennsylvania), the act intends to unify the current patchwork of state laws surrounding the right of publicity. According to Dean, “Not only does our bill protect artists and performers, but it gives all Americans the tools to protect their digital personas. By shielding individuals’ images and voices from manipulation, the No AI FRAUD Act prevents artificial intelligence from being used for harassment, bullying, or abuse.”In late December 2023, <a href="https://news.bloomberglaw.com/product/blaw/bloomberglawnews/exp/eyJpZCI6IjAwMDAwMThjLTg3YmMtZDRlMC1hM2NkLWVmYmRmNDM4MDAwMiIsImN0eHQiOiJURU5XIiwidXVpZCI6IitYYks1YlpPWFVhS0tkRXV4SXJHTmc9PTBWZzNSK2ViVW1seVVNSXJVR2JnRGc9PSIsInRpbWUiOiIxNzAzMjQ2MjgxMTEyIiwic2lnIjoiR1YrajZmcE82U2VIU3dtRjhjWXdjcTNwSTkwPSIsInYiOiIxIn0=?source=newsletter&item=headline&region=digest" target="_blank">several states considered enacting laws in 2024 that would curtail or restrict the use of AI in political campaigns</a>, echoing growing concerns about the new technology’s use in creating and disseminating misinformation about candidates and issues, often referred to as “deepfakes.” According to Bloomberg Law, “Deepfakes are images or videos of a person’s likeness or other related things that have been digitally altered in a bid to misrepresent what happened in reality.” These proposed bills would require disclosures if AI technology was used to generate image, video, or audio of candidates. <a href="https://www.citizen.org/article/tracker-legislation-on-deepfakes-in-elections/" target="_blank">Approximately 25 states </a>have introduced or passed legislation regarding AI in political campaigns.Google is implementing a Chrome browser feature <a href="https://www.mediapost.com/publications/article/392364/google-chromes-third-party-cookie-phaseout-forcin.html?utm_source=newsletter&utm_medium=email&utm_content=headline&utm_campaign=132869&hashid=Azad4XFYCcz6KIOGFqRTBpKIuPE" target="_blank">that cuts off websites’ access to third-party cookies. The initial implementation of the feature, referred to as Tracking Protection, rolled out to 1% of Chrome users </a>in early January. When activated, the feature blocks a website’s access to third-party cookies, which websites use to track user behavior and target them with ads and other marketing content.The new year also saw news organizations <a href="https://arstechnica.com/information-technology/2024/01/at-senate-ai-hearing-news-executives-fight-against-fair-use-claims-for-ai-training-data/">ask Congress for clarification that the use of copyrighted journalistic content to train generative AI large language models </a>is not fair use. Condé Nast CEO Roger Lynch commented, “if Congress could clarify that the use of our content for training and output of AI models is not fair use, then the free market will take care of the rest.” Senator Josh Hawley, one of the lawmakers who is considering introducing AI legislation, had this to offer: “If the AI companies—which are really just the big tech companies—if their reading of fair use prevails, fair use is going to be the exception that swallows the rule. . . . We’re not going to have any copyright law left.”

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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).

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.











Anthony Ramirez

Welcome to 2024 from Socially Aware! We’ve been tracking developments in the law and business of social media and related topics from end of last year into the beginning of the new year.

Social Links: AI Continues to Make the Headlines in 2024

Social media continues to dominate the headlines this spring, with several high-profile events capturing the media’s, regulators’, and lawmakers’ attention.Jack Owoc, founder and former CEO of Bang Energy (“Bang,” a performance energy beverage), claimed that he retained the rights to control Bang’s social media accounts, namely Instagram, TikTok, and Twitter. Owoc claimed that these accounts were intertwined with his own personal brand and therefore belonged to him.The courts and Vital Pharmaceuticals (“Vital”), Bang’s manufacturer, saw things differently. In March, U.S. Bankruptcy Judge Peter D. Russin for the Southern District of Florida blocked Owoc from the accounts; in April, Owoc was forced to delete disparaging comments he made on his Instagram handle @BangEnergy.CEO about advisers who were trying to sell the bankrupt energy drink maker. (Vital, Bang’s parent company, filed for bankruptcy in October 2020.) In March 2023, Vital removed Owoc as CEO, replacing him with John C. DiDonato.Social media account ownership was a hot topic about a decade ago, with several high-profile cases such as <a href="https://cases.justia.com/federal/district-courts/california/candce/3:2011cv03474/243145/28/0.pdf" target="_blank">PhoneDog v. Kravitz</a>, <a href="https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1:2011cv05013/382292/30/" target="_blank">Ardis Health, LLC et al. v. Nankivell</a>, <a href="https://digitalcommons.law.scu.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1153&context=historical" target="_blank">Eagle v. Morgan</a>, and Maremont v. Susan Fredman Design Group LTD,which we discussed here in the 2013 article <a href="https://www.jdsupra.com/legalnews/ownership-of-business-related-social-med-52890">“</a><a href="https://www.jdsupra.com/legalnews/ownership-of-business-related-social-med-52890" target="_blank">Ownership of Business-Related Social Media Accounts</a>.” We provided additional coverage of similar work-related social media account ownership issues in our 2012 post, “<a href="https://www.sociallyawareblog.com/topics/which-side-are-you-on-employers-and-employees-battle-over-ownership-of-social-media-accounts" target="_blank">Which Side Are You On? Employers and Employees Battle Over Ownership of Social Media Accounts</a>.”In addition, we’ve had our eye on other aspects of the social media fabric for more than a decade. In two 2014 posts (“<a href="https://www.sociallyawareblog.com/topics/whats-in-a-like_01" target="_blank">What’s in a Like</a>” and “<a href="https://www.sociallyawareblog.com/topics/she-liked-it-she-really-really-liked-it-federal-district-court-holds-facebook-fan-page-manager-doesnt-own-likes" target="_blank">She Liked It. She Really, Really Liked It: Federal District Court Holds Facebook Fan Page Manager Doesn’t Own ‘Likes’</a>”), we discuss the value of social media “likes” as assets, including likes as protected speech, as property, and as concerted activity. We reviewed cases such as <a href="https://www.ca4.uscourts.gov/Opinions/Published/121671.P.pdf" target="_blank">Bland v. Roberts</a> and <a href="https://www.docketalarm.com/cases/Florida_Southern_District_Court/0--13-cv-61582/Mattocks_v._Black_Entertainment_Television_LLC/101/" target="_blank">Mattocks v. Black Entertainment Television</a> that respectively raised issues of likes as protected speech and likes as property.The recent events of the Bang matter have reignited the conversation around social media account ownership and control. In addition, when a company and its owner/founder are closely aligned, if not synonymous, as was the case with Owoc and Bang, it raises additional questions where the line between a company and a person’s brand identity rests.

Social Links: Social Media Account Ownership Once Again in the Spotlight

Social Links: Social Media Account Ownership Once Again in the Spotlight

Social media continues to dominate the headlines this spring, with several high-profile events capturing the media’s, regulators’, and lawmakers’ attention.

Section 23o, the “<a href="https://www.jeffkosseff.com/home" target="_blank">26 words that changed the Internet</a>,” is once again under scrutiny from lawmakers.At the federal level, Republicans and Democrats on the Senate Judiciary panel’s subcommittee on privacy, technology, and the law found common ground in their calls to reform the <a href="https://www.law.cornell.edu/uscode/text/47/230" target="_blank">27-year-old law</a>. Specifically, <a href="https://www.cnn.com/2023/03/08/tech/senators-section-230-reform/index.html" target="_blank">in a hearing earlier this month</a>, Connecticut Democrat Sen. Richard Blumenthal and Missouri Republican Sen. Josh Hawley joined forces to <a href="https://www.bloomberglaw.com/bloomberglawnews/exp/eyJjdHh0IjoiVEVOVyIsImlkIjoiMDAwMDAxODYtYzI5OS1kYzI3LWFkYmUtZmVkOWZjZjUwMDAxIiwic2lnIjoiUU93MEMvbFdXNjY0ZE81UktqRUw5Sm9VT1cwPSIsInRpbWUiOiIxNjc4MzYzMDQwIiwidXVpZCI6InJwTVBNNC91MUFyV2xnYTA5QWQ3RGc9PVE4R0JPamtJV1NNWmMrR1FCMHpTamc9PSIsInYiOiIxIn0=?bwid=00000186-c299-dc27-adbe-fed9fcf50001&cti=LFVL&emc=btenw_nl%3A15&et=NEWSLETTER&isAlert=false&item=read-text&qid=7431073&region=digest&source=newsletter&uc=1320000033&udvType=Alert&usertype=External" target="_blank">re-examine the immunity that Section 230’s provides</a> to digital platforms and publishers with respect to recommending harmful content to children. This follows the introduction, in 2022, by Senator Blumenthal and Marsha Blackburn, a Republican Senator from Tennessee, of the <a href="https://www.congress.gov/bill/117th-congress/senate-bill/3663/text" target="_blank">Kids Online Safety Act</a>, which aimed to shield children from online content that covered eating disorders, suicide, and sexual exploitation.At the state level, <a href="https://www.npr.org/2023/03/24/1165764450/utahs-new-social-media-law-means-children-will-need-approval-from-parents" target="_blank">Utah’s Governor Spencer Cox just signed two bills into law</a> that prohibit minors from creating an account on any digital property (whether a website, social media platform, or other electronic forum) unless they have express consent from a parent or legal guardian and provide official documentation identifying the child and the parent. The new laws, <a href="https://le.utah.gov/~2023/bills/static/SB0152.html" target="_blank">S.B. 152 Social Media Regulation Amendments</a>, would require any website or other platform with more than 10 million account holders from allowing a minor to register for and post content without such consent. In addition, these new laws also prohibit children under 18 from using social media platforms between 10:30 p.m. and 6:30 a.m.(Previously, <a href="https://libertas.org/bill/sb-152-restrictions-on-social-media-use-by-minors/" target="_blank">S.B. 152 passed the Utah House of Representatives 60–11 and the Utah Senate 23–4</a>.)Opponents to the bill, most notably the <a href="https://www.eff.org/" target="_blank">Electronic Frontier Foundation</a> (EFF), argue that requiring age verification would <a href="https://www.eff.org/deeplinks/2023/03/age-verification-mandates-would-undermine-anonymity-online" target="_blank">undermine online anonymity</a> not only for the minors the proposed law seeks to protect, but for all online users.These developments arise in the wake of the Supreme Court’s hearing in February in <a href="https://www.sociallyawareblog.com/topics/supreme-court-to-address-section-230-for-first-time" target="_blank">Gonzalez v. Google</a>, a case involving the question whether Section 230 immunizes online service providers when they use algorithms to recommend content to users, specifically terrorism-related videos posted on YouTube by other users of the video-sharing service.

Social Links: Section 230 Under Scrutiny (Again) From Lawmakers

Section 23o, the “26 words that changed the Internet,” is once again under scrutiny from lawmakers.
At the federal level, Republicans and Democrats on the Senate Judiciary panel’s subcommittee on privacy, technology, and the law found common ground in their calls to reform the 27-year-old law.

Social Links: Section 230 Under Scrutiny (Again) From Lawmakers

Lots of press surrounding Microsoft’s purchase of LinkedIn: Will <a href="http://www.practicalecommerce.com/articles/124212-Will-LinkedIn-Change-after-Microsoft-Purchase" target="_blank" rel="noopener">LinkedIn change</a> as a result? Will the Microsoft purchase inspire a <a href="http://www.newsfactor.com/story.xhtml?story_id=100007TBFZ7G" target="_blank" rel="noopener">Twitter acquisition</a>?“Spam King” gets 30 months in jail for sending 27 million messages.One columnist says you should <a href="http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=5&ved=0ahUKEwjry5b4ua3NAhUN6WMKHa17BnMQqQIILCgAMAQ&url=http%3A%2F%2Fwww.forbes.com%2Fsites%2Fjefffromm%2F2016%2F06%2F16%2Fstop-measuring-reach-in-your-social-media-marketing-its-about-genuine-engagement%2F&usg=AFQjCNG2gQP0QQ7GnZYuf6-POwhOkBF5rw&sig2=32FVXgD-bQnsNyyav7-mOA&bvm=bv.124272578,d.dmo" target="_blank" rel="noopener">stop measuring your social media marketing</a> reach.Twitter is now allowing brands to target ads to people based on their <a href="http://venturebeat.com/2016/06/15/twitter-now-lets-advertisers-target-ads-by-emoji/" target="_blank" rel="noopener">use of sentiment, food and passion emojis</a>.Entertainment streaming companies are tapping social media to learn what resonates with viewers.Brands can now create their own<a href="http://www.adweek.com/socialtimes/youtube-director/641034" target="_blank" rel="noopener"> ads on YouTube</a> on the cheap using a smartphone.Here’s an infographic illustrating <a href="http://www.slideshare.net/MyCaseSD/lawyers-and-social-media-in-2016" target="_blank" rel="noopener">how lawyers are using social media</a> to market themselves.Some insight into <a href="http://www.adweek.com/socialtimes/one-out-of-three-internet-users-are-social-creators-report/641049" target="_blank" rel="noopener">why influencer marketing works</a> and best practices for teaming up with influencers online.This article describes <a href="http://www.businessinsider.com/what-exactly-are-brands-posting-on-snapchat-2016-6" target="_blank" rel="noopener">what kinds of brands are joining Snapchat</a>, and what types of content they’re posting to the platform.Snapchat aims to become a huge player in digital ads. <a href="http://www.cnbc.com/2016/06/14/how-snapchat-aims-to-become-a-huge-player-in-ads.html" target="_blank" rel="noopener">Here’s how</a>.

Social Links: The ramifications of Microsoft’s LinkedIn purchase; the brands using Snapchat; lawyers’ social media use

Lots of press surrounding Microsoft’s purchase of LinkedIn: Will LinkedIn change as a result? Will the Microsoft purchase inspire a Twitter acquisition? “Spam K

Social Links: The ramifications of Microsoft’s LinkedIn purchase; the brands using Snapchat; lawyers’ social media use

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

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.

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