Social media is booming, but the benefits need to be weighed up with the legal risks.
WHAT would happen if your employees posted client details or confidential information on Facebook? Or set up a page to make fun of a competitor’s product? Or posted negative comments about their own company, a supplier, competitor, or even worse, a client?
Could your staff members be breaking the law by using social media? As a business owner, what are your rights and responsibilities?
Social networking websites such as Facebook, Myspace, Twitter and LinkedIn are now part of daily life and business thanks to new technology.
In essence the technology allows users to post material on websites, which is then available for other users to see and comment on.
The website owner establishes the platform but it is the users who provide the content; and this is why it is such a legal minefield.
The content can include text – ranging from simple comments to extended narratives – photographs, videos, audio, business graphics, logos, and other graphic material. Businesses and individuals can set up their own pages.
The whole concept of social media is for these sites to be as interactive as possible so that users can comment on content and engage in online discussion.
It is a simple and very cost effective way of communicating with others, building a loyal following and increasing your visibility and credibility.
Small and large businesses have been quick to embrace this new media.
But the implications of social media misuse are significant from a legal perspective and arise because of the user-generated content and interactivity.
Despite detailed terms and conditions imposed by the website operators, which must be agreed to by users before they can participate, the website operators simply cannot stop users from posting content which may have legal consequences. Anyway, who reads the terms and conditions?
The social media websites also have privacy policies, technology to identify, monitor and block inappropriate content, and ways to take information off the web. But it is the user-generated content that gives rise to the legal risks involved in establishing or participating in the activities of social networking sites.
Privacy is by far the biggest issue, with copyright infringement and anti-social activity also high on the agenda. For example, stalking via social media may be a criminal offence, as would posting material obtained using illegally placed cameras.
By their very nature, social networking websites involve users posting personal information about themselves on the web. The business model of these sites is based on the exchange of personal information and social interaction, which in turn attracts advertisers.
But exposing personal and business information to a global audience gives rise to a number of serious legal issues.
This could be especially sensitive when other users post information without the consent of the person or business involved.
For example, an employee might disclose information on a transaction he or she is working on, providing valuable information to a competitor. Or the employee might have some choice words to say about his employer or clients.
In Australia it is generally accepted there is no general right of privacy that could be invoked by a person aggrieved by the disclosure or use of personal information.
Business owners and managers need to be aware of the Privacy Act and the 10 National Privacy Principles, which deal with the collection, use and disclosure of personal information. The law relating to breach of confidence can also be invoked where information of a personal or commercial nature is disclosed.
The Privacy Act does not apply to individuals acting in their own personal capacity, so it has little impact on users posting information on social networking websites in their personal capacity. Small business operators are also not subject to the act.
Importantly though, the Privacy Act does apply to the activities of larger companies and organisations and to the activities of employees of such companies acting within the scope of their employment. But the act is short on penalties (unlike, for example, the Spam Act) and in practice the act can be a toothless tiger. Privacy laws are being reviewed and it would be no surprise if penalties for breach were introduced.
From a business aspect, it is the collection of personal information on social media websites that is of great value to other businesses. Consumer trends, databases, and content are of great commercial value to marketers of products and services. What many social media users probably don’t understand is that every single keystroke and activity is being captured, monitored, and analysed.
Social networking sites are all about people ‘being out there’, so their whole strategy and design is about encouraging people to interact and disclose information about their personal lives. In many ways this is contrary to what privacy is all about.
It is when this information gets disclosed to unexpected third parties that most people get upset. There have been complaints against Facebook because of the way it handles private information and the difficulties with its privacy settings.
If you imagine that what you put up on a social networking site is going to be seen by everybody then this should guide your decision making on what to disclose.
The benefits of social media can outweigh the legal risks if you know what you are doing and you put some controls in place.
It is especially important for employees to know the rules. I would highly recommend even small organisations have a formal social media policy outlining what is and is not acceptable from an employee perspective.
For larger organisations, the role of social media is an issue that is being discussed by directors in boardrooms around the country. Controlling the legal and reputational risk is going to become a significant issue.
Having a central person coordinate any social media activity that is of a business nature may be a simple and low cost way of having greater control and therefore minimising legal risks.
There have been examples of employees harassing other employees on Facebook and this could be interpreted as an extension of the workplace. There have been instances of employees being sacked because of comments posted on Facebook and then challenging the fairness of the dismissal.
Other issues to be considered include defamation and trade libel laws, where social networking is a new way of defaming people or disparaging products or services. The dissemination is immediate and worldwide.
Social media allow others to post a variety of content where the person posting such content does not own the copyright, or has no licence or consent from the copyright owner. Therefore it is easy to infringe copyright and, generally, posting content online is not treated differently to other forms of copying.
Always ensure employees are aware of their social media responsibilities, especially breach of confidence, privacy and copyright. Always include written express terms of employment around social media so there are clear rules and regulations to guide both employee and employer.
If done well, everyone can enjoy the benefits of richer communication that social media brings.
• Guy Provan is a Perth-based intellectual property and technology lawyer.
