Matthew Pryke, partner at Hamlins LLP and an expert in legal matters relating to commercial and intellectual property rights
Ryanair’s new head of communications Robin Kiely made a u-turn on an initial promise to continue “keeping 80 million passengers informed” when he suggested recently that Ryanair would turn its back on social media for more “traditional” communication channels.
Kiely’s decision is brave, especially in light of a Deloitte study of customer loyalty in the hotel and airline industries which suggested 40% of customers want to engage via social networks or social media.
His comment reignited the debate about the value of social media and its role in marketing and communications. A question of equal significance is whether it is possible for a business to be legally compliant without engaging with social media?
People often view social media as a discreet part of communications, yet it is subject to the same regulations and legislative regime as other areas of business.
The notion that activities on social media are unregulated or uninhibited is misguided. Director of Public Prosecutions Kier Starmer recently confirmed that Twitter is not a place where individuals can “go and say what they like”.
So it would be short-sighted to believe that by “opting-out” of social media a company can maintain compliance with the law.
Considerations such as defamation, advertising standards, consumer protection, employment law, privacy, e-commerce, brand protection and data protection are all relevant to social media.
A company that chooses not to engage is still subject to the law.
For example, tweets by employees about a business, its employees, services or products would be caught by advertising standards such as the CAP Code, Consumer Protection Regulations, employment laws relating to discrimination and bullying, confidential information and use of personal data.
If a business simply chooses not to have a social media presence or identity (such as a Facebook page) it is difficult to identify how these risks are being managed.
There may be an immediate cost saving to abstaining from social media, but there is a real risk of legal liabilities and claims.
Inevitably, consumers, journalists, employees and competitors will make statements and comparisons about a business and its services via various social media channels.
If there is no intention to monitor or respond to these comments in a structured manner then a business has no ability to identify content which may involve defamation, false advertising, misleading endorsements, an infringement of intellectual property rights or breaches of employment terms.
This may ultimately lead to loss of goodwill and to the dilution of intellectual property rights.
Employee use of social media may pose risks in the form of derogatory comment, loss of productivity, breaches of privacy or release of confidential information.
If a company fails to establish and enforce a sensible social media policy then it may be difficult to take disciplinary action without being challenged under employment law.
Research by KPMG in October 2012 found one in four company executives had witnessed “sensitive information” wrongly posted on social media websites.
The crucial damage is loss of business and brand reputation. However, a failure to address social media can ultimately lead to a business being held to have acted unlawfully.
The number of claims relating specifically to social media has been limited to date. But a number of corporations have had their fingers burnt as a consequence of having limited or non-existent policies in place.
In the US, a financial services regulator said recently: “An institution that has chosen not to use social media should still be prepared to address the potential for negative comments or complaints that may arise within social media platforms…and provide guidance for employees use of social media.”
If you close the door entirely on social media, legal compliance is virtually impossible.
For businesses which have sensibly crafted social media policies, it is essential these are vetted by an expert.