John Villafranco of law firm Kelley Drye Collier and Shannon took the magnate to task. "Imagine you work in compliance [for the company, which went un-named]. Imagine the CEO is making claims about a competitor--or worse, say, giving opinions about the Federal Trade Commission (FTC) which, he says, is 'acting in a biased, adversarial manner, using bullying and unethical tactics.' Imagine that these regulators maintain your CEO's postings and rely on them to make their case. As you sit here today, ask yourself, could you have prevented that from happening?"
The FTC, was, in fact, in the house. Mary Engel, associate director of the commission, delineated the points of law around blogging, online spokespeople and social media, such as the fact that the FTC isn't interested in consumer reviews or consumers' own blogs, though consumer posts on a company's site makes the company responsible.
Also present was Justin Brookman, assistant attorney general of the New York State Attorney General's office. His presence was timely, since that office is taking action against Facebook for allowing children to engage the site with very little screening or protocol to protect kids.
Engel said that, often enough, marketers who engage in deceptive blogging get tripped up by their language or inauthenticity. Sony, for instance, had launched a blog touting PlayStation, called "All I want for Xmas is a PSP," reportedly promulgated by a hip-hop artist. "It wasn't too long before other bloggers got suspicious," she recalls. "Turns out it was not authentic, but a fake blog put up by a public relations firm." Sony, she says, admitted the error, and took the blog down. "The tip-off was the language."
She offers marketers these tips for avoiding tarnishing one's brand and getting unwanted attention from the FTC:
Brookman, who noted that his office on Tuesday had subpoenaed Facebook, said most of the office's efforts have to do with companies' efforts to "regain control" of the information process by overt or implied threats.
"Accusations of false libel, for instance," he said, adding that the office has brought cases involving "anti-benchmarking" claims, in which a company says a consumer who buys its product can't post critical reviews or comparisons. "There have been cases where companies have tried to force customers to take down criticism from the Web. Although courts would throw it out, what such companies do is threaten lawsuits against bloggers."
He says his office has taken its condemnation further, saying that not only are such claims unenforceable, and suits brought against consumers on the basis of such claims without merit, but the claims themselves should be regarded as deceptive.
Brookman said the AG's office in 2002 brought a case against Network Associates [which makes McAfee anti-virus software], which, he said, had made it sound like it was a violation of federal law to test its software. "They had sought to coerce a small online magazine to take down their critique of the software. The judge refused to pursue the case and threw it out.
"But," he added, "just putting these provisions in a contract is, in our opinion, deceptive. It has the ability to chill public conversation. We don't need to prove deception, or demonstrate deceptive practice, just a practice that has the tendency to deceive. Generally, we will be very skeptical about any prohibition on consumer speech."
Darren Bowie, assistant general counsel at AOL, says this year, as many as 48% of companies will deploy marketing on social-networking channels--an increase from 38% last year. "A flip side of user-generated content: what happens if all of a sudden blogs are criticizing your companies' products? What should you do? There have been actions brought by companies against bloggers; there have been more than 50 by corporations against individuals. The Media Law Research Center says four have gone to trial and with jury verdicts for the plaintiffs, the companies.
"It's important to look at the big picture. First, you need to think about whether filing a lawsuit will generate more adverse publicity and attention." He said that, by way of example, last month the A&P, a grocery-store chain, sued two college students who had worked there, and had produced a video "showing them in all sorts of antics with the company's produce.
The company has sued them for defamation and created backlash in the blogosphere. So it's a balancing act. Then, will you be able to locate, identify and find the people who are doing it? And even if you can find them, can you enforce the order? How enforceable is any relief you secure?"
His final piece of advice: "I would conclude that whether you are in-house counsel or not, check out what blogs are saying about your company."