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.

Social

Search

sociallyaware-abajournalweb100-1

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.

rubin_aaron_blog_150x150.png

rubin_aaron_common_640x280.jpg

rubin_aaron_heroretina_2700x1160.jpg

rubin_aaron_mobileretina_750x1040.jpg

rubin_aaron_social_600x600.jpg

Partner

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.

gallick_lawrence_blog_150x150.png

gallick_lawrence_common_640x280.jpg

gallick_lawrence_heroretina_2700x1160.jpg

gallick_lawrence_mobileretina_750x1040.jpg

gallick_lawrence_social_600x600.jpg

Of Counsel

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.

ramirez_anthony_blog_150x150.png

ramirez_anthony_common_640x280.jpg

ramirez_anthony_heroretina_2700x1160.jpg

ramirez_anthony_mobileretina_750x1040.jpg

ramirez_anthony_social_600x600.jpg

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

favicon.ico

favicon-16x16.png

favicon-32x32.png

apple-touch-icon.png

MoFo Favicons

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.

Welcome to Socially Aware

240920-socially-aware-header.jpg

Welcome to Socially Aware

240920-socially-aware-header

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.

News and Announcements

Blog - Terms of Use

Blog - Privacy Policy

Blog - Blog Disclaimer

Blog - Attorney Advertising

morrison-foerster-blog-logo.png

Provides a data-driven look at the Federal Circuit.

Federal Circuitry

Brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry.

MoFo Tech

Mofo Tech

Equips our clients with the most up-to-date and relevant information on employment and labor law issues.

Employment Law Commentary

In-depth analysis of developments and trends impacting government contracting.

Government Contracts Insight

Government Contracts Insights

Provides insights and reports on the most current class actions lawsuits and product liability issues that affect consumer-facing companies.

Class Dismissed Blog

Class Dismissed

MoFo’s Socially Aware blog provides timely updates and analysis of the many complex and cutting-edge legal and business issues arising out of social media.

Socially Aware

  Linkedin

MoFo LinkedIN

Socially Aware Blog - RSS

Stay Connected

Never miss a post from Socially Aware. Enter your email below to stay up-to-date.

Subscribe

The Law and Business of Social Media

Morrison Foerster - Footer

On August 6, 2014, the UK’s financial services regulator, the Financial Conduct Authority (FCA), issued long-awaited draft guidance on the use of social media i

Blogs -  Home Button

Home

Blog - Topics

Web Scraping

Advertising

Antitrust

Arbitration

Artificial Intelligence

Asia

Autonomous Vehicles

Bankruptcy

Big Data

Blockchain

Class Actions

Cloud Computing

Compliance

Contracts

COPPA

Copyright

Crowdsourcing

Cyberbullying

Cybersecurity

Data Security

Defamation

Digital Content

Disappearing Content

Discovery

DMCA

E-Commerce

E-Discovery

E-Personation

Electronic Contracts

Employment Law

Endorsement Guides

Ephemeral Messaging

Ethics

European Union

Event

Fair Use

FDA Regulations

Financial Institutions

First Amendment

Fraud

Free Speech

GDPR

Hacking

Influencer Marketing

Infographic

Internet of Things

Investment Management Law

JOBS Act

Labor Law

Litigation

Live streaming

Marketing

Mobile

Online Contracts

Online Endorsements

Online Promotions

Online Reviews

Patent

Privacy

Product Liability

Protected Speech

Right of Publicity

Right To Be Forgotten

Section 230 Safe Harbor

Securities Law

Social Media Policy

Statistics

Status Updates

Stored Communications Act

Supreme Court

Terms of Use

Trademark

UK High Court

User-Generated Content

Wearable Computers

Topics

Blog - Editors

Editors

Blog - About

About

Blog - Subscribe

UK’s Financial Services Regulator Issues Draft Guidance on Social Media – Should We Favourite* or #Fail?

UK’s Financial Services Regulator Issues Draft Guidance on Social Media – Should We Favourite* or #Fail? | Socially Aware

On August 6, 2014, the UK’s financial services regulator, the Financial Conduct Authority (FCA), issued long-awaited draft guidance on the use of social media in financial promotions by regulated financial institutions.But if financial services firms operating in the UK were hoping that this guidance would provide them with a clear framework to help jump-start their social media strategies, they will be disappointed. For one thing, the guidance is focused on financial promotions, so firms will need to continue to evaluate all of their social media activities carefully against existing FCA rules.The proposed guidance – “GC14/6 Social media and customer communications: The FCA’s supervisory approach to financial promotions in social media” (“Guidance”) – is open for consultation until November 6, 2014. The FCA intends to continue discussions with the financial services sector during the consultation period. It has also set up the hashtag #smfca for those wishing to discuss the Guidance on Twitter.GuidanceAs outlined in our previous alert “Behind the Curve – Are Legal & Regulatory Concerns Preventing UK Financial Services Companies From Fully Harnessing Social Media”, until now the UK financial services regulator has offered very limited guidance on the use of social media. The FSA (the FCA’s predecessor) issued a two-page high-level guidance paper on financial promotions using new media back in June 2010. Compare this with the U.S. where various items of regulatory guidance (see our previous Guide to Social Media and the Securities Laws) on the use of social media, including from FINRA, FFIEC, and SEC, have been published.This lack of regulatory clarity in the UK has been seen by some UK-based financial institutions as a deterrent from fully harnessing the benefits of social media, as highlighted at a <a href="http://www.theguardian.com/media/2014/jul/29/fca-social-media-guidelines-financial-sector-regulator" target="_blank" rel="noopener">recent Social Media Leadership Forum event</a>.In the new draft Guidance, the FCA acknowledges that social media can be a particularly powerful channel of communication, and is increasingly becoming the preferred media for customer communications and financial promotions. The FCA states that it does not want to prevent social media use. However, the FCA acknowledges that forms of digital media often have character, space, and/or time limitations, which can constrain their use. It appreciates that, in some circumstances, firms may perceive difficulties in complying with the FCA’s rules when using digital media. Accordingly, the Guidance is intended to clarify and confirm the FCA’s approach to the supervision of financial promotions in social media.The FCA’s objectives include promoting effective competition in the interests of consumers, as well as consumer protection. The FCA accepts that digital media can allow new and smaller firms to have a presence in the marketplace, and may also allow firms to reach a wider audience. In principle, this can make it easier for consumers to switch providers and enhance competition. The FCA therefore sees significant potential benefits from the use of digital media by firms, as long as this is responsible and customer-focused.The FCA repeats the position that it took in previous guidance and in all public statements made previously on the topic of social media (i.e., that its rules are intended to be media-neutral). The overarching principle for all communications with consumers is that they must be “fair, clear and not misleading”.The key recommendations included in the Guidance are as follows:<ul><li>Any form of communication made by a firm is capable of being a financial promotion – the key is whether it includes an invitation to engage in financial activity.</li><li>Each communication must be considered individually and comply with the relevant rules.</li><li>Some communications, including advertisements, will not include an invitation to engage in financial activity – for example, communications solely relating to the firm’s community work, etc.</li><li>Only financial promotions made in the course of business will be caught by the FCA rules. The definition laid down in the rules effectively requires a commercial interest on the part of the firm. The FCA provides a couple of examples to illustrate the issue: <ul><li>if a company is already operating, it will be acting “in the course of business” when seeking to generate additional capital. However, if the company has not yet been formed, and the proposed founders approach friends and family to obtain start-up capital, they will not generally be acting “in the course of business”; and</li><li>where a personal social media account is used by someone associated with a business, say the CEO, that business and individual should take care to distinguish clearly personal communications from those that are, or are likely to be understood to be, made in the course of that business.</li></ul> </li><li>All financial promotions made via digital media must be clearly identified as such. If using Twitter, the FCA suggests including #ad in the tweet.</li><li> Firms must identify risks, as well as benefits, and comply with applicable past performance rules.</li><li>Risk warnings must be suitably prominent. If a risk warning is set out in too small a font size and/or lost in surrounding text, the promotion will not be compliant. Of course, social media often poses particular challenges because of space or character limitations. The FCA has suggested that one solution is to insert images (such as infographics into tweets) – as long as the image itself is compliant.</li><li>The FCA acknowledges that the functionality which allows a Twitter image to be permanently visible may be switched off so that the image appears simply as a link. Accordingly, any risk warning or other information required by the rules cannot appear solely in the image.</li><li> It may be possible to signpost a product or service with a link to more comprehensive information, provided that the signpost remains compliant in itself.</li><li>Firms may be able to advertise through image advertising, which is less likely to cause compliance issues. An image advertisement (i.e., an advert that only includes the name of the firm, a logo or other image associated with the firm, contact point, and a reference to types of regulated activities provided by the firm or its fees or commissions) may be exempt from financial promotion rules, but will still need to be fair, clear, and not misleading.</li><li>All communications must be fair, clear, and not misleading, even if the communication ends up in front of a non-intended recipient (e.g., due to a re-tweet, etc.). One way of managing this risk is to use software that enables advertisers to target particular groups very precisely.</li><li>Where a recipient shares or forwards (e.g., re-tweets) a firm’s communication, responsibility for that communication lies with the communicator so the firm would not be responsible (although the original communication would obviously still need to be compliant). However, if a firm re-tweets a customer’s tweet (e.g., one praising its customer service), the firm would be responsible even if the firm did not create the tweet.</li><li>For the purpose of FCA rules, a tweet is not a real-time communication because it creates a record, is directed at multiple recipients, and doesn’t require immediate response.</li><li>Being a follower of a regulated firm on Twitter or having “liked” its Facebook page does not constitute an “existing client relationship” or “express request” for a communication under applicable rules. Issuing a financial promotion to such an individual would therefore be considered unsolicited.</li><li>Firms need to put in place adequate systems for signing off digital media communications. Sign-off should be by a person of appropriate competence and seniority within the organisation. The FCA doesn’t address how this is achieved when social media activities themselves are outsourced.</li></ul>Other IssuesThe draft Guidance focuses on financial promotions, but firms are likely to have to consider other regulatory issues in the context of a social media strategy. For example, in terms of complaints-handling, it may be challenging for firms to identify when complaints are being made via social media and whether their complaints-handling procedures capture such complaints. In addition, if a firm outsources any critical activities as part of its social media strategy, it will need to take account of applicable outsourcing rules and guidance.There is also a whole host of general legal issues arising from the use of social media that firms will need to consider, e.g.: in terms of:<ul><li>market abuse rules;</li><li>employees’ and agents’ use of social media – both external platforms and internal communication/collaboration platforms;</li><li>use of social media in recruitment;</li><li>data privacy and security;</li><li>crisis management and damage to reputation;</li><li>protection and infringement of intellectual property rights;</li><li>general advertising and marketing rules (e.g., the <a href="http://www.cap.org.uk/Advertising-Codes/Non-broadcast-HTML.aspx" target="_blank" rel="noopener">CAP Code</a>);</li><li>consumer protection/unfair terms and trading rules;</li><li>user generated/third party content; and</li><li>insurance.</li></ul>These issues are not covered in the draft Guidance.ConclusionThe Guidance does not introduce any major surprises. The FCA had warned that the Guidance was not going to be prescriptive, and it isn’t. By and large, it follows very closely existing guidance relating to financial promotions, and includes some pretty clear-cut examples of compliant and non-compliant communications.In order to give firms further clarity in respect of their social media compliance, there are certain areas where the FCA could consider widening the scope of its Guidance improvements. For example:<ul><li>the Guidance appears to envisage a traditional form of promotion (albeit via digital media) which involves a firm simply publishing advertisements. Of course, social media is about more than one-way communication. Genuine interactive engagement is what consumers are looking for and is the key to the most successful social media strategy. Accordingly, it would be helpful for the FCA to include a few more nuanced scenarios in its Guidance, such as where a firm’s employee has a dialogue with a customer or potential customer via social media;</li><li>as firms are increasingly using social media for customer services and complaints, it would be helpful to provide some illustrations of compliance in this area; and</li><li>the FCA has communications with consumers very much in mind, but we know that firms in the Business-to-Business sector are increasingly using social media in their business. Accordingly, it would be helpful for the FCA to consider including some B2B-specific scenarios in the final Guidance;</li></ul>So, overall, the draft Guidance is not a #fail, and is a step in the right direction, but #smfca is unlikely to be trending any time soon.In the meantime, firms may just have to take a deep breath and take the plunge. After all, social media is just another way of communicating with customers – so firms need to exercise the same common sense, judgment, and risk-balancing that they use with other types of media. As social media is increasingly the way that consumers want to communicate, staying out of the game is no longer an option.