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Social Media: top 3 legal issues for businesses

Social media is transforming the way we do all business. According to recent figures, more than 70% of small-to-medium sized businesses use social media channels such as Facebook, Twitter, Instagram and LinkedIn to market themselves and interact with their customer-base, and of those who do, more than 50% post at least daily. But the opportunities of these platforms also come with their own set of risks. Here, Mike Wilson, Partner in our Litigation Dispute Resolution team discusses some of the most common legal issues for businesses arising from social media and its usage.

1. Defamation and malicious falsehood

We all have a right to freedom of expression under common law, but the posting of disparaging comments and fake or negative reviews online can be extremely damaging to businesses of all sizes. Often, the chosen approach is to ignore it, or to respond positively, but the reach of social media platforms such as Twitter, Facebook and Instagram is vast and, in some cases, that may not be an option.

If a post or review adversely affects a person’s or organisation’s reputation, is untrue, and has caused or is likely to cause serious harm to the subject, they may have a cause of action under the law of defamation and/or for malicious falsehood. The remedies available from the courts include damages, an order to remove the offending statement and an injunction to prevent its repetition.

Action can also be taken before starting court proceedings to put the platform on notice and to require it and the persons responsible to take down the defamatory statement, and to publish a retraction and apology and/or make an offer of amends.

Businesses should also be aware that they can be vicariously liable for statements made by their employees on social media, whether or not on official accounts, if made in the course of their employment. As such, employers should make sure they have appropriate policies in place and that they monitor their employees’ use of social media channels.

2. Copyright and intellectual property

Another common problem is the unauthorised use of works protected by copyright or that incorporate a third party’s trade mark or brand on social media platforms.

Copyright protects original works such as images, other audiovisual content, text and other content. It can even cover Tweets or other social media posts themselves. Copyright infringement occurs when a user has copied a work protected by copyright, or a substantial part of it, without permission.

Where online content uses a registered trade mark in the course of business, without permission, that may constitute a trade mark infringement. Therefore, if users are misled into thinking that a post or social media page is that of a brand owner (rather than that of the unrelated third party), or is authorised or endorsed by them, it may constitute passing off.

Intellectual property issues such as these can give rise to a claim for damages, an order for the removal of the infringing content and an injunction against any further infringement.

Businesses can protect themselves against such problems by consistent monitoring and taking action to enforce their own intellectual property rights against infringement. They should also have clear and effective policies in place for their own employees’ use of social media.

3. Confidential information

Social media allows users to communicate with each other instantly and can be used as a forum to share or publish sensitive or secret information. Confidential information includes any information concerning a business or its affairs that is not already generally available to the public. It can include information such as customer lists or details of contacts, information on pricing or contracts, business plans and financial information, and/or information about products or business processes.

The deliberate or inadvertent release of confidential information through social media can have serious consequences for a business but the law can be used to protect such information.

Any publication or unauthorised use of confidential information online is likely to be a breach of the common law of confidence. It may also be a breach of contract. The owner of the information can take action against the persons responsible, or in some cases the social media platform, to obtain the removal of the information (by an injunction) and to claim damages. It is worth noting, however, that this may not provide a full remedy because, due to the dynamic nature and exponential reach of social media, the damage is frequently already done by the time the information has been posted online.

The best way to avoid this is by having robust policies in place for all employees and making sure they are kept up to date and appropriately enforced. It is also important to take practical steps to secure and restrict access to sensitive commercial information.

Conclusion

Although social media undoubtedly offers many opportunities to businesses in an increasingly connected and interactive world, it is important that these businesses do not lose sight of the problems that it can cause. In addition to the more common issues discussed above, social media can give rise to many other legal problems for business, including issues relating to goods and services advertised online, data protection issues and issues relating to misuse of private information and harassment through trolling and cyber-bullying. It can also result in criminal prosecution for offences under the Malicious Communications Act 1988, Communications Act 2003 and the Computer Misuse Act 1990.

The most important point for businesses and employers to take away from this article is the importance of ensuring they have good and effective policies in place to protect themselves. These policies should be developed from sound advice, tailored to the particular needs of the business and should cover all aspects of social media use and monitoring to protect its confidential information and intellectual property rights. It is also important for these policies to provide guidelines for employees regarding their own social media usage and to provide clear guidance to ensure swift and decisive action is taken when dealing with any infringing or problematic content.

Mike Wilson is Partner in our Litigation and Dispute Resolution team. If Mike and the team can assist you and your business with legal advice that is tailored to your particular requirements, talk to the team today by calling 01482 325242 or email mike.wilson@andrewjackson.co.uk

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