Social Media Marketing and Promotions on Facebook and in other Social Media from a Legal Perspective

17.10.2012

With the increasing popularity of social media, companies have begun to take advantage of social media in marketing their products and services in ever greater extent. Popular advertising channels are online communities such as Facebook, search engines such as Google, and blogs, including, in particular, fashion and food blogs. More recently, promotions involving lotteries in which the advertiser undertakes to draw a price among the participants that have “liked” a wall post or page have become popular on Facebook.

In Finland, the law does not contain separate regulations that would govern social media marketing. Therefore, social media marketing must comply with the general marketing and advertising rules provided for by the law. Fundamental rules applying to advertising and marketing in Finland constitute the prohibition of inappropriate advertising and the prohibition to use unfair practices in marketing activities. Advertising is considered inappropriate, for example, if it is clearly in conflict with generally accepted social values, if it is discriminating or if it relates approvingly to activities that jeopardize the health of someone.

The prohibition of unfair practices means, among other things, that the commercial purpose of an advertisement must be recognizable and that advertising must not relate the advertised products to another company’s trademark, trade name or another distinguishing mark. The law also prohibits the provision of false or misleading information in advertising. Correspondingly, advertisements must not omit essential information. The terms and conditions of promotions including lotteries, competitions and games, must be clear and may not provide false information about the prices and awards related to the promotion.

In social media marketing the requirement to bring forth the commercial purpose of an advertisement means that the website’s visitors must be able to identify advertisements from the website’s actual content. Most often this is the case, as advertisements are usually clearly separated from the website’s actual content or then they are highlighted to enable the visitors to identify them as advertisements. However, blogs in which the authors test, use and write reviews and recommendations about products that they have tried or used are more complicated from a legal point of view, since the authors often receive the products from companies that provide the products to the author free of charge hoping their product will receive visibility on the blog. If the author only receives product samples every now and then without any obligation to write about the product on the blog, then it may hardly be argued that the blog or a certain blog post would have a commercial purpose. However, if the author is entitled, for example, to use the products of a certain company unlimitedly as an explicit or indirect compensation for posting reviews and recommendations of the products on the author’s blog or, in particular, if the author and the seller have entered into an agreement about publishing reviews and recommendations of the seller’s products on the blog, then it may be argued that the blog or the blog posts concerned have a commercial purpose which should be disclosed to the readers according to the law.

The prohibition to exploit the trademark, trade name or another distinguishing mark of another company is relatively clear also in social media marketing: advertisements must not contain information that may mislead consumers regarding the brand or the manufacturer of the advertised products. It should also be noted that the European Court of Justice has prohibited the use of another company’s trademark as a keyword in Google AdWords campaigns, if the keyword corresponds to the other company’s trademark and the keyword is used for advertising similar products to which the trademark in question is related, provided that it is not clear from the advertisement that the products do not originate from the trademark owner.

The terms and conditions of social media marketing promotions that include lotteries, competitions or games must be clear, understandable and easily accessible. The law does not contain provisions regarding the contents of the terms and conditions nor does it stipulate where the terms and conditions should be published. Depending on the specifics of the promotion, the main options are usually to include all the terms and conditions in the marketing material or, if the terms and conditions are more extensive, to include the main conditions in the advertising material with a reference to the full terms and conditions which may be held available on, for example, a website. The terms and conditions should include the name of the promoter, the term of the lottery, competition or game, the manner in which one may participate in the promotion, special requirements for participation, such as age and residency requirements, the criteria on the basis of which the winner of a competition or game of skill is determined, information about the prices and the number of prices involved, information of special requirements or restrictions related to the use of the price(s), and the date and manner in which the winners are announced. Further, the advertiser should note that the advertised product must dominate the overall impression of the advertisement rather than the lottery, competition or game. Otherwise, the advertisement may be considered to affect the consumers’ ability to make an informed buying decision adversely and therefore to be incompliant with fair marketing practice.

If participation in a lottery, competition or game requires that the participants send material subject to copyright, such as pictures or other such material, to the advertiser, the terms and conditions of the promotion should provide for the terms of use of such material. The advertiser should also pay attention to rules related to personal data protection, including the obligation to prepare a personal data register legend, if the lottery, competition or game involves collection of the participants’ personal data, such as names and contact information.

Advertisers using social media as a marketing channel should also make sure that their marketing campaigns are in line with the terms of use of the social media in question. For example, Facebook’s terms of use prohibit the use of Facebook functions as a means for registration in a promotion (meaning that the promotions mentioned in the beginning are often contrary to Facebook’s terms of use). The terms of use further prohibit users to place the use of a Facebook function as a prerequisite for participation in a promotion and require promoters to clearly state in the terms and conditions of the promotion that Facebook has not participated in arranging the promotion.

MK-Law advises and assists advertisers with planning and reviewing advertisements and marketing promotions from a legal perspective. Please feel free to contact us at any time by email at info(at)mklaw.fi.

Sources: Consumer Protection Act (38/1978); Unfair Business Practices Act (1061/1978); Personal Data Act (523/1999); Decree on Unfair Marketing Practices (601/2008); Decision C-236/08–C-238/08 of the Court of Justice of the European Union; Advertising and Marketing Communication Practice: Consolidated ICC Code; Guidelines of the Consumer Court: Promotional lotteries 2011.