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Network interference - a legal guide to the commercial risks and rewards of the social media phenomenon. US. A conversation began that has yet to subside. The second edition added Europe.
This third edition is a major update and covers virtually every aspect of social media and the law on a global basis. Most importantly, this White Paper remains a living document as we add more chapters and update those we have, making sureit continues to be the definitive source for legal issues in social media. We welcome your ideas and comments as well.
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If you have anything you’d like to share with us—good or bad—please send it to. Paul Matulac at pmatulac@reedsmith.
Thank you. Gregor Pryor Douglas J. Wood and Stacy Marcus. Editor, Europe Editors, United States. April 2. 1, 2. 01. Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenonreedsmi t h . Wood – dwood@reedsmith.
Stacy K. Marcus – smarcus@reedsmith. TABLE OF CONTENTS —Introduction .......................................... Advertising & Marketing ................................ Brand Protection & Reputational Management ............ Copyright (EU) .......................................
Copyright (U. S.) ...................................... Data Privacy & Security ............................... Employment Practices ................................ Food and Drug Administration ..........................
Government Contracts & Investigations .................. Insurance Recovery ...................................
Litigation, Evidence & Privilege ......................... Product Liability...................................... Securities (UK) ....................................... Securities (U. S.) ...................................... Trademarks ........................................ Patent Minefield ............................. Biographies of Authors and Editors ....................
Guide to Social Media Terminology and Websites ........ Endnotes .......................................... Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenonreedsmi t h . This White Paper will help you tomaximise the huge potential benefits of this revolution and protect against the inherent legal risks surrounding social media. Inthis document, you will find practical, action- oriented guidelines as to the state of law in the United States and Europe in thefollowing areas: Advertising & Marketing; Commercial Litigation; Data Privacy & Security; Employment Practices; Food & Drug. Administration, Government Contracts & Investigations; Insurance Recovery; Litigation, Evidence & Privilege; Product Liability; Securities; Copyright & Trademarks. As we continue to expand the White Paper, we will add additional chapters as well asupdates.
So be sure to bookmark http: //www. Legal Bytes blog. What is Social Media and What Does it Mean to Business?
Everyone has heard of Facebook, Linked. In, You. Tube, and Twitter.
These are just the tip of the iceberg. There are thousands ofsocial media sites with billions of participants. And it’s not just individuals. Multinational companies and their CEOs areincreasingly active in the social media space via blogs, Facebook fan pages, You. Tube channels, Twitter handles and muchmore.
Everyone is a user and, as with every new communication channel—billboards, radio, television, the Internet—there ishuge potential, and huge potential risks. The speed of development in social media outstrips corporate risk management capability. It took radio 3. 8 years to reach. Terrestrial TV took 1.
The Internet took four years to reach 5. In less than nine months, Facebook added 1. It’s All About the Conversation. One- way communications with advertising, press releases, labels, annual reports, and traditional print media is going the way ofthe dinosaur. We no longer just listen.
Audiences are not static. We now engage in a conversation. What was said in the livingroom is now published on Facebook.
What we do in public and private is now broadcast on You. Tube. What employees talkedabout at the water cooler now appears as tweets on Twitter. All of it memorialised in discoverable form. All of it available tomillions with the simple press of “post.”Social media is about “changing the conversation”—getting people to say the right things about your company and its productsand services.
A Shift in Media Values. Broadcasters have now caught on to the idea that social media fundamentally affects the presentation and even the content oftheir product. The music industry now embraces social media, using it as a valuable promotional tool. Even the movie industryget in on the act, perhaps even earlier than intended, with the phenomenal success of the online marketing program for the “Blair. Witch Project.” At the time of its release, the “Blair Witch” site was in the top 5. Internet, creating avibrant “word- of- mouth” campaign that ultimately helped a $7. Social media represents.
Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenonreedsmi t h . They can engage with their audience in ways that were previouslyimpossible, and can leverage that engagement with commercial opportunity. However, with this opportunity comes a threat—You. Tube allows everyone to be a broadcaster. As our chapter about copyright demonstrates, social media strikes at the veryheart of the proprietorial foundation upon which traditional media campaigns are built. Managing Reputation – The Asymmetrical Consumer Relationship. Historically, brand owners were able to determine the relationship that consumers had with their brand.
Now, thanks to socialmedia, consumers are the ones who increasingly define how the brand is perceived. A major retailer asked a simple question on its Facebook page—”What do you think about offering our site in Spanish?”According to its Senior Director, Interactive Marketing and Emerging Media, the response “.
There werehundreds of negative responses flowing in, people posting racist and rude comments. Our contact center was monitoring this,and they were crying, waiting for a positive comment to come in.” The racist and negative responses posted by purported “fans”were so bad that the site was shut down, with a spokesperson noting, “We have to learn how to respond when negativecomments are coming in.”3. United Airlines broke a passenger’s guitar.
They handled his complaint through traditional procedures, eventually refusing to payfor $1,2. In response, the passenger posted a humorous music video to draw attention to United’s consumer supportincompetence on You. Tube. 4 To date, there have been nearly 6 million views of the video. After two other videos, and after. United donating the cost of the guitar repairs to charity per the musician’s requests, United managed to lose the musician’s bags,an event that was reported to millions in the blogosphere. The story was a lead story on CNN’s Situation Room, reported byanchor Wolf Blitzer.
As a result, United’s stock value fell considerably. To add insult to injury, the incident is impacting the law. U. S. Barbara Boxer (D- Cal.) is championing the Airline Passenger Bill of Rights Act of 2. United debacle. 9.
We can’t help but wonder if United would have fared better if it had discarded the old way and instead engaged in theconversation using the same social media platforms that were used to attack its brand. For at least one major company, engaging made all the difference. Two employees of Domino’s Pizza posted a disgusting videoon You. Tube in which they adulterated the chain’s food. In addition to reporting the video to the police, Domino’s Pizza’s CEOposted his own video, apologising for what consumers saw and assuring them that such things were neither condoned norpracticed at Domino’s. It all made the “Today Show” and other media reports. Both traditional media and the blogosphereapplauded his open communication and willingness to engage in a conversation about the problem.
Rather than seeing itsbrand value and reputation take a major blow, it survived the negative media. As social media pioneer Erik Qualman puts it, “A lot of companies say we’re not going to do social because we’re concernedabout letting go of the conversation, and what I argue is that’s like an ostrich putting their head in the sand. You’re not aspowerful as you think.
You’re not going to enable social to happen, it’s happening without you so you might as well be part of theconversation.”1. Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenonreedsmi t h . Doing so whilebeing mindful of the laws that apply in a social media context will help alleviate risk. What You Need to Do. Every concerned party needs to take some important steps if it is going to be prepared for the new media revolution.
Here are afew. Find out what your company and your employees are doing. Do they haveany customised pages on platforms like Twitter and Facebook? If so, make sure they’re complying with the site’s terms andconditions, as well as your corporate communications policies. Are they blogging? Are employees using social media duringwork hours? But be careful to keep on strategy,don’t ban what you cannot stop, and keep in mind the basic rules of engage, participate, influence, and monitor.
Social media has forever changed the brand/customer relationship. It challenges brand ownersfundamentally to reappraise the way they market themselves. This White Paper will be an invaluable tool in helping you to dojust that. Welcome to the New World.
Network Interference: A Legal Guide to the Commercial Risks and Rewards of the Social Media Phenomenonr e e d s m i t h . Marcus, Partner – smarcus@reedsmith. Douglas J. Wood, Partner – dwood@reedsmith. Frederick Lah, Associate – flah@reedsmith. United Kingdom. Huw Morris, Associate – hmorris@reedsmith.
Germany. Stephan K. Rippert, Partner – srippert@reedsmith. Katharina Weimer, Associate – kweimer@reedsmith.