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Social Networking Sites: How to Avoid the Legal “Gotchas”

Social networking sites such as Facebook and MySpace or social networking services such as Twitter can be powerful tools in promoting action sports events and personalities. The demographics of those sites and action sports fans mesh well and social media can help keep fans engaged in an event or product through promotional videos, athlete interviews, Twitter updates, blogs and contests.

Most of the established action sports companies and athletes have one or more footholds in social networking sites. ESPN’s X Games has a Facebook page with over 100,000 friends; there are videos, comments from fans, and information about upcoming events. Shaun White has over 50,000 followers on Twitter, and Tony Hawk’s is closing in on 2 million followers.

Social media might be great, but there are some very real legal concerns that should be considered when using social media to help market action sports.

First and foremost, users need to know each site’s terms of use. Some social networking sites limit a user’s marketing and promotions activities. For example, MySpace Terms & Conditions state that “MySpace Services are for the personal use of Members and may only be used for direct commercial purposes if they are specifically endorsed or authorized by MySpace” and “MySpace reserves the right to remove commercial content in its sole discretion.” Violation of terms of use can result in account termination (which would be embarrassing if the site has thousands of friends or fans) and even lawsuits. MySpace filed a lawsuit against a company that sent commercial email messages to MySpace members in violation of its terms of use.

A social networking site might also limit certain promotions. Facebook requires users to get written permission before offering any contest, sweepstakes or giveaway, and Facebook does not allow users to administer the promotion on the Facebook site, other than through applications connected through the Facebook Platform.

Social networking sites may also claim that they have a right to use any content that users post on the site for any reason in any medium forever. That means a social networking site could use pictures, videos or quotes from a user’s page or profile to advertise its own services.

A social networking site’s privacy policy also should be considered. If fans are invited to participate in blogs or contests, and are required to provide personal information, it should be determined ahead of time if the social networking site collects, uses or shares that information with third parties. If a company has a privacy policy that says it won’t share any personal information, but the social networking site allows such sharing, there is a possibility that the company would be violating its own privacy policy and angering its fans and customers. Either outcome can lead to lawsuits. Also, because action sports is heavily youth-oriented, users of social networking sites need to be especially aware of the Children’s Online Privacy Protection Act, which limits the online collection of personal information from children under 13 without verifiable parental consent.

Once a presence on a social networking site is created, the page or profile should be regularly monitored. There have been many reported incidents of fraudulent messages posted on blogs, links posted on corporate pages that link to computer viruses, and even fake Twitter messages from prominent athletes. St. Louis Cardinals manager Tony La Russa sued Twitter because someone sent tweets that appeared to be from him. Twitter removed the fake messages and settled the lawsuit with La Russa out of court.

Another legal issue is minimizing liability for content on a site that has been provided by others, including user generated content. If someone posts a defamatory comment on a Facebook fan page, or posts a video on a YouTube channel that is copyrighted by someone else, the owner of that social media site might be sued for defamation or copyright infringement. One way to minimize liability is to provide rules or guidelines for posting content that prohibit defamatory statements and material copyrighted by someone else. There also is a federal statute that can provide a “safe harbor” from a lawsuit for copyright infringement for content posted by someone else, but the benefits of the statute apply only to those who take certain required steps under the statute such as registering an agent with the U.S. Copyright Office and developing a policy that allows a copyright owner to file a takedown notice.

Another concern is violating advertising laws. Content on a social networking site, whether posted by the site owner or users, can lead to claims of false advertising. For example, if a skateboard company were to claim that its skateboards were made with a revolutionary material that will increase speed by 25%, the company has to be able to prove that. Celebrity endorsements can also lead to false advertising claims. There are federal rules that govern what an endorsement should say, what has to be disclosed about paid endorsers, and when substantiation is needed for claims made in an endorsement. In fact, the Federal Trade Commission (FTC) recently issued new guidelines on celebrity endorsements that could affect what appears on social media sites, including those focused on action sports. For example, the new guidelines say that celebrity endorsers can be sued for false advertising for making unsubstantiated claims and that they should disclose when they are being paid to endorse a product or service. The FTC suggests that advertisers provide training to their endorsers and monitor endorsements to make sure celebrity endorsers are following the guidelines.

Social media is a perfect fit for promoting action sports, but the consequences of jumping in without considering the legal issues can be quite severe – including lawsuits, termination of your page or channel, and the loss of fans’ and customers’ goodwill. So before investing time and money developing social media pages, profiles and channels, actions sports marketers should invest a little time in understanding the legal issues and each site’s terms of use.

Brian R. Socolow is a partner at Loeb & Loeb LLP. He represents organizations in the sports industry and other businesses. He is based out of the New York office.

Permission for article reprint has been granted.