Checklist: Legal considerations for social media marketing (USA)

Introduction

This checklist will assist in-house counsel, private practitioners, and compliance personnel to understand the legal considerations associated with social media marketing. The use of social media has spread rapidly, with the legal landscape and practical considerations for organizations continuing to develop. This checklist provides an overview of relevant laws and regulations, as well as practical steps for organizations to take to ensure they are legally compliant.

This checklist addresses the following steps:

1. Defining the goals of social media marketing
2. Identifying and understanding applicable laws and regulations
3. Reviewing third-party content

The checklist is presented as a list of requirements that can be checked off as they are addressed. At the end of each step, there are explanatory notes corresponding with each requirement in the checklist.

This checklist can be used in conjunction with: How to Guide: Issues surrounding online advertising, Checklists: Using product endorsements and Online advertising directed to children and Quick view: Legal risks associated with business social media use.

Step 1 – Define the goals of social media marketing

Step 2 – Identify and understand the applicable laws and regulations

Step 3 – Review third-party content

Step 1 – Define the goals of social media marketing

Before considering the applicable legal framework, it is important to establish what the organization is seeking to achieve through social media marketing. Matters such as the intended purpose and target audience can impact upon the relevant legal issues.

1.1 Establish the purpose of social media marketing

There are a number of potential use cases for marketing on social media.

1.1.1 Brand awareness

Brand awareness is the most common goal of social media marketing. This involves creating and sharing content that highlights a brand’s personality, values, and unique selling points. Effective brand awareness strategies ensure that potential customers can easily recall a brand when faced with a purchasing decision. By leveraging consistent visuals, engaging posts, and impactful storytelling, organizations can establish a strong presence and foster trust among their audience.

1.1.2 Driving website traffic

Driving website traffic involves using social media platforms to attract visitors to the organization’s website. This goal is achieved by sharing content that includes direct links to the site, such as blog posts, product pages, or special promotions. Engaging and relevant social media posts, combined with strategic use of hashtags and calls-to-action, can significantly increase the number of visitors to a website. Increased traffic not only boosts online visibility but also enhances the chances of converting visitors into customers.

1.1.3 Generating leads

Generating leads through social media focuses on identifying and capturing potential customers' interest. This is achieved by offering valuable content, such as eBooks, webinars, or exclusive discounts, in exchange for contact information. Social media platforms provide various tools, such as lead generation ads and sign-up forms, to facilitate this process. By nurturing these leads through targeted campaigns and personalized follow-ups, organizations can effectively convert interested prospects into loyal customers, thereby driving sales and growth.

1.2 Identify the target audience

1.2.1 Business-to-business or business-to-consumer

When defining social media marketing goals, it is crucial to consider whether the target audience is business-to-business (B2B) or business-to-consumer (B2C). B2B marketing focuses on building professional relationships and emphasizes value-driven content that showcases industry expertise, product features, and case studies. On the other hand, B2C marketing prioritizes engaging, relatable content that appeals to individual consumers’ emotions and lifestyle needs. Understanding the distinction helps tailor strategies, content, and platforms to effectively reach and resonate with the intended audience.

1.2.2 Children

Marketing to children requires adhering to specific regulations, such as the Children's Online Privacy Protection Act of 1998 (COPPA), which mandates safeguarding children's personal information online. Social media strategies targeting children must prioritize content that is age-appropriate, engaging, and educational, while ensuring compliance with legal standards. Marketers need to be transparent, avoid exploitative tactics, and obtain parental consent when necessary. By creating content that respects these guidelines, businesses can build trust with both children and their guardians, fostering long-term brand loyalty.

1.2.3 Vulnerable populations

Targeting vulnerable populations in social media marketing requires a sensitive and ethical approach. Vulnerable groups may include the elderly, individuals with disabilities, or those facing economic hardship. Marketing strategies should avoid manipulation and instead focus on providing valuable, supportive content that addresses their specific needs and challenges. Accessibility, inclusivity, and empathy are key elements when crafting messages for these audiences. By promoting products or services that genuinely improve their quality of life, businesses can build a positive brand image and foster meaningful connections with these communities.

Step 2 – Identify and understand the applicable laws and regulations

Social media marketing has become an essential strategy for many businesses to reach their audience, promote their products, and build their brand. However, this powerful tool comes with a complex web of laws and regulations that marketers must navigate carefully to avoid legal pitfalls. Four critical regulatory frameworks that impact social media marketing are discussed below.

2.1 Consider Federal Trade Commission regulations

2.1.1 General advertising regulations

The Federal Trade Commission (FTC) plays a pivotal role in protecting consumers from deceptive and unfair business practices. Its mandate covers all forms of advertising, including those disseminated via social media platforms. The core principle of FTC regulations is that advertisements must be truthful, not misleading, and substantiated. This means that any claims made about a product or service must be backed by solid evidence. For instance, if an organization claims that its product can achieve certain results, it must have scientific proof to support these assertions. Misleading consumers through false claims can lead to significant penalties and damage to the brand's reputation.

2.1.2 Online advertising regulations

The FTC aims to eliminate deceptive advertising, and its Endorsement Guides provide detailed guidance for advertisers and endorsers to comply with the law. While these Guides do not have the force of law, they provide the best indication available of what practices in a particular industry or business sector will be regarded as a deceptive or unfair practice.

Influencer marketing, in particular, has come under scrutiny (see FTC Guidance: Disclosures 101 for Social Media Influencers). Influencers, who often have substantial followings, must disclose any material connections with the brands they endorse. If someone endorses a product on social media, their message must clearly disclose any ‘material connection’ they have with the brand. A ‘material connection’ includes personal, family, or employment relationships, as well as financial ties, such as receiving payment or free or discounted products or services from the brand. Disclosing these relationships to followers is crucial because it ensures endorsements are honest and transparent, allowing followers to properly evaluate the value of a recommendation. The disclosures should also be clear and conspicuous, positioned in such a way that they are hard to miss. For example, using hashtags like #ad or #sponsored at the beginning of a post can help meet these requirements. The goal is to ensure that consumers are aware of the commercial relationship behind the endorsement, allowing them to make informed decisions.

For further information, see How-to guide: Issues surrounding online advertising.

2.1.3 Data privacy and security 

The FTC also plays a significant role in enforcing data privacy and security regulations, particularly as they relate to online advertising and consumer data collection. The FTC actively monitors and investigates companies that engage in unfair or deceptive practices concerning consumer data. This includes misrepresenting how data is collected, used, or shared, as well as failing to implement reasonable security measures to protect sensitive consumer information. For example, if an online advertiser collects personal data from users, they must clearly and conspicuously inform users about their data collection practices and obtain appropriate consent when necessary.

The FTC has also taken action against companies that have experienced data breaches due to inadequate security protocols, highlighting the importance of robust cybersecurity measures to protect consumer information from unauthorized access or disclosure. Companies are expected to be transparent about their data handling practices and to take reasonable steps to safeguard the data they collect, or face potential enforcement actions and penalties from the FTC. This aspect of FTC regulation is particularly relevant in the age of personalized advertising, where vast amounts of consumer data are collected and analyzed to target ads.

To illustrate this, Facebook entered into a consent order in 2012 about misrepresenting the privacy and security of users' personal information and the extent to which it shared this information with third parties. Facebook shared data from Facebook friends with third-party app developers, even when those friends had more restrictive privacy settings. Facebook also failed to properly screen app developers before granting them access to user data and misrepresented users' ability to control facial recognition features on their accounts. Beyond that Facebook breached a FTC Act's prohibition against deceptive practices by reusing phone numbers, originally collected for two-factor authentication, for advertising purposes. The case is ongoing. 

2.2 Consider Securities and Exchange Commission regulations

2.2.1 Investment offerings

The Securities Exchange Act of 1934 (15 USC Ch 2B) grants the Securities and Exchange Commission (SEC) broad authority over all aspects of the securities industry. The SEC regulates the dissemination of information related to investment offerings to protect investors and maintain market integrity. When marketing investment offerings on social media, organizations must ensure that all information shared is accurate, complete, and not misleading. This involves providing potential investors with a balanced view of the potential returns and associated risks. For example, if an organization highlights high potential returns, it must also disclose the risks and the possibility of losses. The SEC mandates that all promotional content must be substantiated by reliable data and presented honestly.

Regulation Fair Disclosure (Reg FD) requires that publicly traded companies disclose material information simultaneously to all investors and not just to selected investors. When companies use social media for significant announcements, they must also disseminate this information through traditional channels to ensure equal access for all investors. Failure to comply with Reg FD can lead to SEC enforcement actions, including fines and other penalties. Organizations must carefully plan their social media strategies to avoid selective disclosure and ensure compliance.

2.2.2 Non-registered securities

Marketing non-registered securities on social media is fraught with regulatory challenges. While social media offers a broad reach, organizations must be cautious about public solicitation rules, especially in the context of private placements and other exempt offerings. Marketing non-registered securities, such as those offered under Regulation D (an SEC regulation that allows organizations that meet certain requirements to issue securities without registering those securities with the SEC), involves strict adherence to SEC rules on general solicitation and advertising. For instance, certain private placements can only be marketed to accredited investors. Organizations must verify the investor's status before making an offer. Social media campaigns must be carefully targeted to avoid broad, unverified solicitations, which could violate SEC regulations.

The SEC strictly prohibits false or misleading statements about any securities, including non-registered securities (see 17 CFR 240.10b-5). Exaggerating potential returns or minimizing risks is not allowed. All claims must be substantiated and presented in a fair and balanced manner. Misleading social media promotions can result in severe penalties, including fines and legal action.

2.3 Consider Food and Drug Administration regulations

2.3.1 Health claims

Health-related claims regulated by the Food and Drug Administration (FDA) fall into three categories:

• authorized health claims – these are claims pre-approved by the FDA and supported by significant scientific evidence;
• authoritative statements – these are statements based on recognized scientific bodies and must be truthful and not misleading; and
• qualified health claims – these are claims based on emerging evidence and require disclaimers indicating the limited nature of the evidence.

All claims must be backed by credible research and presented accurately to avoid misleading consumers.

2.3.2 ‘No evaluation’ disclaimer

When promoting dietary supplements or other health-related products on social media, marketers must include disclaimers if their claims have not been evaluated by the FDA. This is crucial to prevent consumers from being misled about the regulatory status of the product. A typical ‘no evidence’ disclaimer might state, ‘These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure, or prevent any disease.’ The disclaimer must be prominently displayed to ensure that consumers understand the claims are not endorsed by the FDA (see CFR21 101.93).

2.4 Consider Health Insurance Portability and Accountability Act

2.4.1 Marketing by health care providers

The Health Insurance Portability and Accountability Act of 1996 (HIPAA), enforced by the Department of Health and Human Services (HHS), sets strict rules on how healthcare providers can use and disclose patient information for marketing purposes. When healthcare providers use social media for marketing, they must ensure that they do not violate HIPAA's privacy and security rules. For instance, before using a patient’s health information in a social media post, explicit consent must be obtained from the patient. Even with consent, healthcare providers must be cautious about sharing information that could inadvertently identify the patient and compromise their privacy.

For more information about relevant legal issues, see Quick view: Legal risks associated with business social media use.

Step 3 – Review third-party content

It is crucial that organizations have a clear and documented understanding of the ownership status of any third-party content they wish to use and their relationship with any social media influencers and other content-creators. Failing to do so can lead to disputes in relation to issues such as trademarks and data privacy, as well as potential breaches of rules relating to product endorsements.

3.1 Review relationships with influencers/endorsers

3.1.1 Restrictions on endorsers

Social media influencers have become indispensable in marketing strategies due to their ability to reach and engage large audiences. However, their activities are governed by stringent regulations to ensure transparency and fairness. Regulatory bodies like the FTC require influencers to disclose any material connections with brands they endorse (see FTC Guidance: Disclosures 101 for Social Media Influencers). This includes financial compensation, free products, or other incentives. The FTC’s guidelines aim to prevent deceptive marketing practices and ensure that consumers are aware of any potential bias. Brands must therefore ensure that their influencers comply with these regulations to avoid legal repercussions and maintain consumer trust. Failure to disclose such relationships can lead to FTC enforcement actions and penalties for both the influencer and the brand, tarnishing reputations and leading to financial losses.

3.1.2 Trademark/brand affiliation

Trademark and brand affiliation issues are another critical concern. Influencers must use a brand's intellectual property, such as logos, slogans, or product images, correctly and with explicit permission. Unauthorized use can result in trademark infringement claims, which can be costly and reputationally damaging to both parties. Organizations should issue specific guidelines to influencers on how their trademarks should be used to maintain consistency and avoid legal issues. These guidelines should ensure that the brand's image is portrayed accurately and positively.

3.2 Review use of third-party generated content

Third-party generated content is content that has been created or authored by someone outside of an organization, but used on the organization’s website.

3.2.1 Permission

Securing permission is the foundational step in using third-party generated content. Without explicit consent from the content creators, organizations that use the content of others risk infringing on copyright laws, leading to potential legal repercussions and reputational damage. Permission must be clear and unequivocal, indicating that the content creator agrees to the organization’s use of their material. This can be achieved through direct communication via social media messages, emails, or formal agreements. Documenting this permission in writing is crucial, as it provides a clear record of the consent granted, specifying the scope of use, duration, and any conditions attached to the agreement. Transparency about the intended use of the content is also vital. Brands should inform content creators about where and how their content will be used, whether it will be modified, and the duration of its use. This level of transparency not only builds trust but also encourages more users to contribute their content willingly.

3.2.2 User submissions

User submissions are a valuable asset for many organizations, providing genuine and relatable content that often resonates more deeply with audiences than professionally produced material. This content may be a photo, a video, or a written comment posted to a website. For example, a satisfied purchaser of a product may submit a comment praising the product, and that submission is then used to promote the product. However, managing these submissions involves several legal and ethical considerations. Organizations must establish clear terms and conditions that govern how submitted content will be used. These terms should outline the rights the organization is requesting, such as the right to use, modify, and distribute the content, and whether the user retains ownership or grants the organization certain rights. Transparency in these terms is crucial, as it helps build trust and encourages more users to participate. Additionally, organizations must ensure that their terms comply with relevant copyright laws and regulations. This includes adhering to data protection laws if personal data is involved in the content. Providing proper attribution to content creators, where applicable, is not only a legal requirement in some jurisdictions but also a good practice that acknowledges and respects the creator’s contribution. This recognition can foster goodwill and motivate other users to submit their content.

3.3 Consider the ownership status of online content

There are a number of ways in which the rights to online content can be structured.

3.3.1 License

A license grants the organization specific rights to use third-party content without transferring ownership. Organizations can negotiate the scope of the license, including its duration, geographic reach, and permitted uses. For instance, an organization might obtain a license to use a user’s photo in a social media campaign for six months. Licensing agreements should be detailed to avoid any ambiguity regarding the rights and obligations of both parties. They should also specify any restrictions on the use of the content and the extent to which the organization can modify it. Properly structured licenses ensure that both the organization and the content creator understand their rights and responsibilities, reducing the risk of disputes.

3.3.2 Assignment

Assignment involves a complete transfer of ownership from the content creator to the organization. This means the organization acquires all rights to the content and can use it as it sees fit. While this option provides the organization with greater control, it is often more expensive and may deter content creators who wish to retain some rights over their work. Clear and fair compensation is crucial when negotiating assignments to ensure mutual satisfaction. Organizations must also ensure that the assignment agreement is legally sound and comprehensively covers all aspects of the transfer. This includes specifying the scope of the rights being transferred and any conditions attached to the transfer. Properly negotiated assignments offer organizations the freedom to use the content in various ways without legal restrictions.

3.3.3 Transfer of ownership

Transfer of ownership is a comprehensive process that involves legally transferring all rights from the creator to the organization, similar to assignment but often more formalized. This process typically involves detailed legal agreements that cover all aspects of the transfer, including rights, obligations, and compensation. This method provides the organization with long-term control over the content, allowing for extensive use without needing further permissions.

Additional resources

Christine Haight Farley (2023), Trademarks in an Algorithmic World
Jenna Jacobson, et al (2020), Social media marketing: Who is watching the watchers?

Related Lexology Pro content

How-to guides:

How to establish a social media governance framework
How to investigate the social media activity of prospective employees
Issues surrounding online advertising
How to protect brand authenticity on social media 

Checklists:

Policy for employee use of an organization’s social media accounts
Using product endorsements
Online advertising directed to children
Dealing with false statements on social media

Quick views:

Legal risks associated with business social media use

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