The next time you go on Facebook to gush about the latest whipped delight you bought at Starbucks, you might first want to stop and think whether you or anyone in your family works there …
C. Douglas Weber - April 11, 2013
Imagine you love running. You love it so much that you enjoy reading and sharing information about it through social media. You tweet about running on Twitter, post about it on Facebook, and chat about it on running websites, telling fellow runners about your favorite local trails and how much your new pair of Nike’s has improved your 5K time. That’s all well and good, unless you happen to forget to mention, while praising those shoes, that you work for or own stock in Nike. In that instance, you may be unwittingly breaking the law.
According to the Federal Trade Commission, a person who promotes, via print or social media, a company or product for which they are directly invested or employed, must disclose that relationship or face fines and/or penalties. Recently, Ashton Kutcher was accused of such “deceitful advertising” for a piece he guest-edited in an online-only version of Details magazine. The editorial featured reviews of almost a dozen technology companies Kutcher failed to mention he was invested in. This appeared to run afoul of the FTC’s Guide Concerning Use of Endorsements in Testimonials in Advertising. The Guide was revised and updated in 2009 in an attempt to better reflect the new reality of electronic media advertising having moved into social media-type expression. The revised Guide requires the disclosure of any “connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement.”
Now, a company cannot reasonably be expected to be responsible for every word any of its employees posts online, so the FTC has made it clear that companies will not be punished if they take appropriate steps to prevent such behavior. The FTC has indicated that, as long as a company has strict social media policies for their employees in place, the company itself will typically not be investigated for acts of “deceitful advising” if the employee violates the policy and published such questionable content. And, it can be assumed, you are free to sing the praises of Nike shoes if you just own a few shares of Nike stock. If you are a significant investor in a company (as Kutcher was) however, full disclosure of that fact is required before you begin to editorialize.
So, the next time you go on Facebook to gush about the latest whipped delight you bought at Starbucks, you might first want to stop and think whether you or anyone in your family works there …