Navigating Privacy and Spam Compliance in Social Media Advertising

Navigating Privacy and Spam Compliance in Social Media Advertising
David Elder Stikeman Elliott September 20, 2011
STIKEMAN ELLIOTT LLP
www.stikeman.com
Navigating Privacy and Spam Compliance
Types of Social Media

Blogs e.g. Wordpress, Blogger Wikis e.g. Wikipedia Social Bookmarking e.g. Delicious, Digg Social Network Sites e.g. Facebook, LinkedIn Status Update Services e.g. Twitter Virtual Worlds e.g. Second Life Media Sharing Sites e.g. YouTube, Flickr
SLIDE 3
Online Advertising Options

Display advertising
Minimal targeting nature of site
Contextual advertising
Targeting based on current visit to single site search query
Behavioural advertising
Targeting based on profile developed based on history of sites
visiting, on-site activity inferred interests and demographics
Social advertising
Targeted based on context and interaction with site, real interests
and demographics, activities of connections
Leverages social connections as examples, endorsements
SLIDE 6
Social Media Advertising & Promotion

Display ads Targeted ads Fan pages Events, groups, Applications contests, quizzes, games User reviews and discussion fora Social ads, Promoted tweets Like, +1, retweet, etc. Almost any on-net activity can be shared with user networks
SLIDE 7
So what could go wrong?
SLIDE 8
Privacy and Social Media

Privacy is dead, and social media is holding the smoking gun. Pete Cashmore, Mashable CEO Neither privacy nor publicity is dead, but technology will continue to make a mess of both. Danah Boyd, Harvard
Fellow
The value of being connected and transparent is so hight that the roadbumps of privacy issues are much lower in actual experience than peoples fears. Reid
Hoffman, LinkedIn Founder and Executive Chairman
SLIDE 9
Applicable Privacy Requirements

Knowledge & consent required for collection, use & disclosure of personal
information
Sensitivity of information and reasonable expectations of individual
relevant to acceptable form of consent
Purposes must be identified at or before collection Cant require consent as condition of supply or product or service, unless
required for legitimate core purposes
Collection to be limited to what reasonably required to fulfil purposes Personal information to be retained only as long as reasonably necessary to
fulfil purposes
Personal information to be accurate and up-to-date Individual right of access Protected by reasonable security safeguards
SLIDE 10
Application So far...
OPC has taken expansive view of what constitutes
personal information.
cookies IP addresses
Can include:
Online tracking and behavioural data? Particular concern re mobile data/devices
Although may appear in public domain, doesnt mean it
can be used for any purpose
SLIDE 11
The Facebook Decision

Noted advertising was a legitimate primary purpose for
collection of personal information
Therefore, opt-out consent OK But social ads more intrusive, require enhanced
explanations to users
App developers access to personal information too open-
ended, more specific consents required
Opt-out insufficient
SLIDE 12
Data Protection & Security

Rich and personalized data from social nets and apps are
very valuable to identity thieves, fraudsters mobilized
Hacking is now about organized crime, targeted and well Protect user data accordingly Keep only what you need, de-personalize if possible try
to avoid ID theft keys and transmitted data
Consider https connections, encryption for both stored
SLIDE 13
Privacy Concerns
45% of Cdn social network users are concerned about
associated privacy risks
83% believe companies should ask permission to track
online behaviour and Internet usage
90% showed widespread concern about businesses that
request too much personal information, dont keep it secure, sell it to others, or use it to send spam of personal information were vague
Majority of social network users feel explanations of use

2011 Canadians and Privacy Survey
Children & Privacy

No COPPA in Canada, but: PIPEDA requires knowledge and consent higher hurdle for
children?
Was amendment in C-29 which would have bolstered consent
standard:
reasonable to expect that the individual understands the nature, purpose and consequences of the collection, use and disclosure of the personal information to which they are consenting.
OPC has voiced concern, sees as vulnerable group; focusing on
outreach, education
Proceed with extreme caution

SLIDE 16 STIKEMAN ELLIOTT LLP
Appropriation of Personality
Relevant to social ads that use name, likeness of someone
in network in association with endorsement, sale personality, but only old media cases media ads, implied endorsements
Canadian law recognizes tort of misappropriation of Similar claims being made in other jurisdictions re social Important to have clear and unambiguous consent May still be liability if claims relate to fake profiles
SLIDE 18
Core Anti-Spam Requirement

prohibited to send or cause or permit to be sent to an Have the express or implied consent of the recipient Message is in the prescribed form:
identifies sender/person on whose behalf sent contact info for sender/person on whose behalf sent
electronic address a commercial electronic message unless:
No cost, easy unsubscribe mechanism:

Same means as message sent, or other electronic means Gives Electronic address/web link for unsubscribe Effective without delay, no later than 10 business days
SLIDE 19
Canadas Anti-Spam Legislation: Summary

Prohibits sending commercial electronic messages without
express consent (some exceptions)
Creates identification, contact and unsubscribe obligations Prohibits the installation of a computer program without
express consent (some exceptions) messages without express consent
Prohibits the alteration of transmission data or rerouting of Creates detailed disclosure requirements to obtain consent Creates significant monetary penalties for non-compliance Creates private right of action for damages stemming from
SLIDE 20 STIKEMAN ELLIOTT LLP
Key Definitions I
electronic message means a message sent by any
means of telecommunication, including a text, sound, voice or image message. connection with the transmission of an electronic message to
a) b) c) d)
electronic address means an address used in
an electronic mail account; an instant messaging account; a telephone account; or any similar account.
SLIDE 21
Key Definitions II
1(2) For the purposes of this Act, a commercial electronic message is an electronic message that, having regard to the content of the message, the hyperlinks in the message to content on a website or other database, or the contact information contained in the message, it would be reasonable to conclude has as its purpose, or one of its purposes, to encourage participation in a commercial activity, including an electronic message that
a) b) c) d)
offers to purchase, sell, barter or lease a product, goods, a service, land or an interest or right in land; offers to provide a business, investment or gaming opportunity; advertises or promotes anything referred to in paragraph (a) or (b); or promotes a person, including the public image of a person, as being a person who does anything referred to in any of paragraphs (a) to (c), or who intends to do so.
SLIDE 22
Key Definitions III

6. (1) It is prohibited to send or cause or permit to be sent to an electronic address a commercial electronic message unless
a) b)
the person to whom the message is sent has consented to receiving it, whether the consent is express or implied; and the message complies with subsection (2) [requirements as to sender ID, contact info, unsubscribe] that is sent by or on behalf of an individual to another individual with whom they have a personal or family relationship, as defined in the regulations;
(5) This section does not apply to a commercial electronic message

a)
9.It is prohibited to aid, induce, procure or cause to be procured the doing of any act contrary to any of sections 6 to 8.
SLIDE 23
Not Just for eMail

Applies to broad array of electronic messages: instant
messaging, SMS, social media outright sales pitch
Broad application to commercial activity not just Generally require express consent to send Could be liable if seen to induce social net user to send
commercial message to another without consent
SLIDE 24
Anti-Spam Issues for Social Ads

Proposed regs define personal relationship narrowly Issue with forward-to-a-friend suggesting or enabling
forward could attract liability
Identification requirements exhaustive, could be
particularly challenging in social media space users timelines cant opt out
Twitter just announced will be introducing some ads into
SLIDE 25
Best Practices - Privacy

Dont leave it to social net operator or ad aggregator/server Stay on top of Canadian and international laws and trends re
privacy, spam test again
Assume the worst; law of unintended consequences --test and Transparency re collection, use and disclosure practices Prominent, easy to understand, access FAQs, layers Get best consent you can scroll and click Keep records onus on you to prove
SLIDE 26
More Best Practices - Privacy

Choose partners carefully Caution re third party sharing Great caution re aggregation with off-net info Extra caution re location information Monitor User Generated Content Robust security firewall, encryption, limit retention Be aware of perceptions, reasonable expectations
SLIDE 27
Best Practices - Spam

Dont spam and tell users not to Review/modify practices for obtaining/developing target lists,
choose vendors/partners carefully
Review/modify formats for electronic marketing Ensure effective and timely unsubscribe Review/modify program installations, associated disclosures and
consent
Ensure consent records are retained and retrievable Engagement of marketing, brand, technical resources to detect
issues, ensure compliance
SLIDE 28
For further information

David Elder delder@stikeman.com
www.stikeman.com
Effectively Managing Contests And Promotions in a Social Media World

Michael Kilby Stikeman Elliott September 20, 2011
www.stikeman.com
Effectively Managing Contests And Promotions
Overview
1. 2. 3. 4. 5.
Social Media highlights the tensions between marketing objectives and legal objectives It is not correct to say that there are no rules - the old rules are usually adaptable Summary of Key Contest Legal Requirements Implementing Online Contests Pitfalls of Social Media - Managing Social Media Contests and Promotions
SLIDE 31
Social Media highlights the tensions between marketing objectives and legal objectives
How do marketers see social media promotions?
novel edgy dynamic connect with audiences more intimately engage with consumers bypass traditional channels users shape their own experiences go viral create buzz marketing that doesnt feel like marketing
SLIDE 32
Social Media highlights the tensions between marketing objectives and legal objectives
How do lawyers see social media promotions?
what are they?? uncontrolled hazy risky IP issues privacy law issues personal information law issues PR issues headache no clear parameters or boundaries
SLIDE 33
Social Media highlights the tension between marketing objectives and legal objectives
Social Media presents opportunities and risks The very things that make social media powerful (enhanced
reach, user input, ability to go viral, etc.) are the same things that create risks achieving advertising objectives cost-effectively, but they can also backfire and, in the worst case, generate negative publicity
Social Media contests and promotions can be very successful in
SLIDE 34
Are there rules?

There is a misconception that there are no legal rules in relation to Social Media contests / promotions
In Canada, it is true that there is very little by way of specific, new
rules
However, the old rules are broad-based and adaptable The old rules have dealt with new types of media before Drafting new rules may not be desirable not possible to anticipate
all new changes and future issues
Further, websites are creating their own rules
SLIDE 35
Where are there rules?

In Canada, rules surrounding contests / promotions are found in numerous places
Criminal Code Competition Act Provincial Consumer Protection Acts Advertising Standards Canada Canadian Marketing Association Industry Bodies / Industry Associations Website-specific rules and policies Range of other potential laws PIPEDA, IP statutes, etc.
Must consider range of potential legal hurdles. That said, most important contest-specific rules are contained in the Criminal Code and Competition Act
SLIDE 36
Legal requirements in Canada

Competition Act:
Section 74.01 Contests are subject to the general prohibition against
false and misleading representations.
Section 74.06 Regulates the manner in which promotional contests
are carried out with a particular focus on disclosure requirements.
Section 53(1) Makes it an offence to send any form of notice that
falsely gives the general impression that the recipient has won or will win a prize or other benefit.
Also contains rules regarding testimonial advertising
SLIDE 37

The Competition Bureau
Enforcement Guidelines for Promotional Contests
(last updated October 2009).
Provides clarification on what adequate and fair disclosure entails
and the need to provide basic contest details in advertising and point of sale materials. These items are often contained in short-form rules.
All contest advertising should, at a minimum, specify numerous items.
SLIDE 38

Criminal Code
Sections 206(1)(f) and (d) - It is an offence to require entrants to pay
money or other valuable consideration in order to participate in a game of chance or a game of mixed chance and skill, and it is also an offence to award prizes solely on the basis of chance
I. II.
In order to avoid contravening these provisions, contests typically:
provide for a no-purchase method of entry; and incorporate an element of skill commonly satisfied by requiring the winner to correctly answer a time-limited, mathematical skill-testing question
SLIDE 39

Qubec
Qubec-specific legislation places additional requirements for
contests open to residents of Qubec.
Requirements include: Specific content for contest rules (similar to that required under
the Competition Act) Payment of duties and notification to the Qubec Rgie des alcools, des courses et des jeux Payment of a security deposit to the Rgie for various reasons Rules are submitted to Rgie. Changes to the rules are to be submitted to the Rgie. Language requirements. These requirements are under increasing strain in a social media world.
SLIDE 40
IMPLEMENTING ONLINE CONTESTS
SLIDE 41
Implementing Online Contests - Overview

Majority of contests now either function exclusively online or
contain/involve an online element.
In our experience, the purpose of these contests increasingly
seems to be: (i) drive users to websites; and (ii) obtain information about users. effective option.
Online is a quick, convenient, secure (for the most part), and cost Online platform is subject to the same legal requirements as
traditional contests.
In addition to legal requirements, special considerations should
be made when running a contest online. These contests are highly public and are not entirely within the companys control.
SLIDE 42
Special Considerations - Contest Rules and the Entry process

The Competition Bureaus Enforcement Guidelines: Application of
the Competition Act to Representations on the Internet addressed online disclosure for contests
Contest rules should be accessible and the number of clicks required
Users should not have to take an active step to find disclosure
to access them should be limited to one.
Consumers should not be required to navigate several webpages, visit
various sites, or purchase additional software or internet service to access contest rules.
SLIDE 43

Due to the worldwide scope of the internet, material details
regarding geographic applicability of the contest should appear at the point of entry.
Open to legal residents of Canada only. Contest is governed by
Canadian law.
Internet service provider charges will not likely constitute a
purchase requirement, however, software requirements (i.e. requiring the use of a particular browser) may be deemed consideration.
Similarly, requiring consumers to spend excess energy to enter the
contest (i.e. the completion of a lengthy survey or viewing a long video) may be classified as consideration and should be avoided.
SLIDE 44

Clauses addressing internet-specific issues should be included in
the official rules. Examples:
Identity of the entrant Internet service fees and the no purchase necessary
requirement
Corruption or security issues Automatic or fraudulent entries (professional entrants) Include flexibility in the official rules Ability to filter / moderate entries (particularly video or user-
generated entries)
SLIDE 45
Social Media Websites

All social media sites have specific requirements for contests
which are run using or involving their platform

Flickr
For example:
www.flickr.com/guidelines.gne
You may not use Flickr for commercial purposes
Facebook -www.facebook.com/promotions_guidelines.php
Promotions on Facebook must include:
A complete release of Facebook by each entrant or participant. Acknowledgment that the promotion is in no way sponsored,
endorsed or administered by, or associated with, Facebook. Disclosure that the participant is providing information to [disclose recipient(s) of information] and not to Facebook.
SLIDE 46
Social Media Websites

Twitter
twitter
- http://support.twitter.com/articles/68877-guidelines-for-contests-on-
Must discourage the creation of multiple accounts Must discourage posting the same Tweet repeatedly Must encourage the use of topics relevant to the contest
YouTube
- http://www.youtube.com/t/contest_platform_rules
Contest must have a complete set of Official Rules which must be in
compliance with YouTubes Website Terms of Use participate
Contest must not require payment or consideration in order to Release YouTube of any responsibility or liability regarding the
conduct of the contest on your website and in your Official Rules
SLIDE 47
User Generated Content

Contests may require entrants to submit photographs, essays, videos,
etc.
Advisable to include language in contest rules to acknowledge these
submissions and the terms surrounding them.

The content submitted is original to him/her.
Entrants should agree to the following at minimum:

Entrant has all necessary rights to the submitted content. The content will not give rise to any claims of infringement, invasion of
privacy or publicity, or infringe on any third-party rights and/or interests, or give rise to any claims for payment whatsoever. sponsor/administrator.
The submitted content becomes the sole property of the contest The content submitted is subject to review according to the submission
requirements outlined in the Official Rules.
Be prepared to devote resources to the ongoing management of a

SLIDE 48
contest involving user-generated content. Give yourself discretion!

SOCIAL MEDIA CONTESTS GONE WRONG!
SLIDE 49
Social media contests gone wrong!

Molson The Molson Canadian Nation Campus
Challenge Contest
Photo contest on Facebook that targeted 19-24 year old
university/college students.
Goal was to "Be the #1 party school in Canada." Contest was cancelled after numerous complaints from the
dean of students at St. Francis Xavier University and parents of students. cheap marketing were raised.
Many felt Molson "stepped over the line" and concerns about
SLIDE 50

Chevy Design Your Own Tahoe competition
Entrants/participants encouraged to go online and use
designated video clips and music to create a customized commercial for the Tahoe. general - many ads featured profanity and explicit content.
Resulted in ads that were critical of the company and SUVs in Environmentalists inundated the ads with messages about the
harmful effect of SUVs on the environment - for example, one ad stated Like this snowy wilderness? Better get your fill of it now. Then say hello to global warming.
SLIDE 51

Subway v. Quiznos
Video contest by Quiznos calling for participants to submit
homemade commercials about Quiznos sandwiches being "superior" to Subways sandwiches.
Subway sued Quiznos and the website that ran the contest. Lawsuit generated a lot of negative publicity for Quiznos.
Eventually the case was settled out of court.
SLIDE 52

TGI Fridays
Facebook promotion asking participants to like a fictitious
fan character page named Woody. If he could get 500,000 facebook fans by September 30th, 2009 then the first 500,000 would be entitled to a free burger or sandwich.
500,000 fans goal was reached by September 13th. TGI Friday's could not keep up with the coupon demand and
the fans reacted harshly as many did not receive the coupon as promised. fans they had built up on the fan page.
TGI Friday's pulled down the campaign and abandoned all the
SLIDE 53

Burger King The Sacrifice
Facebook users were asked to delete 10 friends in exchange for
a free whopper.
While people can typically unfriend friends on Facebook
discreetly, the Whopper Sacrifice application told people that were unfriended that they had been traded in for a burger. shut down.
The application contradicted Facebook's business plan and was
SLIDE 54
Social media gone wrong!

"Isn't Wal-Mart Great" travel blog
Blog by a travelling couple told stories about stopping across
America at different Wal-Marts and had a folksy, noncommercial vibe.
It was later discovered that Wal-Mart had paid the couple to
write the blog. Wal-Mart paid for the RV rental, gas and a freelance writing fee. misleading representation of a testimonial.
Known an astro-turfing and may be considered as a false and
SLIDE 55

Skittles
Skittles changed its home page to include a collage of content
from Twitter, Facebook, Wikipedia, Youtube, Flickr, where users could add their own messages and interact online.
The majority of the social media feeds were harmless except
for tweets in the Twitter section which included explicit sexual comments and derogatory remarks about the brand.
The interactive site had to be taken down.
SLIDE 56
For further information

Michael Kilby mkilby@stikeman.com
www.stikeman.com
Advertising in a Social Media World

Janet Feasby, Vice President Advertising Standards Canada September 20, 2011
www.stikeman.com
Advertising in a Social Media World September 2011
Topics
Consumer Research
Consumer Concerns about Advertising Impact of Social Media
ASC Consumer Research
To benchmark consumer attitudes prior to rollout of PSA

4 focus groups in November 2010 Online Survey Panel of 1000 Canadians in December 2010
ASC Consumer Research Qualitative
truthful advertising
is accurate; does not exaggerate; facts are verifiable; key details are not hidden; does not mislead; is clear
value of truthful advertising

builds trust in the advertiser/ product; means they do not waste their time/ money; and the advertiser/ product gains their loyalty

Other than being truthful what comprises
acceptable advertising
Is not offensive, demeaning, prejudicial or discriminating; does not prey on peoples vulnerabilities; does not promote excessive violence; does not try to manipulate kids; is appropriately placed given the target groups that could be exposed to it
advertising regulation
is not top of mind with consumers; but consumers say should be done by an independent organization vs. government or industry
ASC Consumer Research Quantitative
consumers find advertising is unacceptable when

it is misleading, unclear or confusing or doesnt present all of the facts
ASC Consumer Research Quantitative
consumers say its important to have rules for advertising and most believe rules in place
Considerations
Dont assume there are no rules Consider applicability of Canadian Code of Advertising Standards:
is the message controlled directly or indirectly by the advertiser? is the message communicated to Canadians? Is the message intended to influence choice, opinion or behaviour?
Considerations
Exercise particular caution with online executions for child audiences Clause 12 (Advertising to Children):
Advertising directed to children must not exploit their credulity, lack of experience or sense of loyalty, and must not present information or illustrations that might result in their physical, emotional or moral harm
For more information

Janet Feasby, Vice President, Standards janet.feasby@adstandards.com Advertising Standards Canada 175 Bloor Street East South Tower, Suite 1801 Toronto, Ontario M4W 3R8 416.961.6311 www.adstandards.com

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Navigating Privacy and Spam Compliance in Social Media Advertising

David Elder Stikeman Elliott September 20, 2011

STIKEMAN ELLIOTT LLP