Advertising laws are now being applied to social media. Any business with a Facebook account or is on Twitter must understand that those means of communication are legally considered advertising.
I attended a great telephone seminar today that was sponsored by the Intellectual Property Section of the California State Bar regarding advertising law. Among the many topics covered was social media as used by businesses.
The Federal Trade Commission and the courts have held that advertising and unfair competition laws apply to the use of social media by businesses. Furthermore, CAN-SPAM, the Federal anti-spam email law also applies.
Facebook has sued several business entities that spammed Facebook users. The courts held that Facebook had standing to use as an ISP under CAN-SPAM and that CAN-SPAM applied to communications on Facebook.
The FTC recently sued a plastic surgery clinic in Florida for unfair competition. The clinic used various types of social media, including blogs, to create an Internet buzz. Employees provided comments on Facebook and fake customers reviews, among other things.
The FTC sued on the basis that such practices were deceptive advertising. If an employee "Likes" his/her employer's Facebook page and provides favorable comments, and does not reveal that the he/she is an employee, then that is the same as writing a false customer testimonial. The business is liable under false advertising and unfair competition laws.
Any business that might get into any form of social media must have a social media policy that takes these legal issues into account.