The world of ever evolving social media can be legally and technologically confining for companies.  ALM recently hosted an event Social Media: Risks and Rewards at the Harvard Club in New York City.  The stage was set for the daylong conference by the keynote Joel Reidenberg, Professor of Law and Director at Fordham University School of Law.   He focused on the impact of Social Media from a user and business perspective delving into a web site’s terms of service, privacy policy and technology.

The lively discussion began with a poll of the audience.  Of the nearly one hundred senior level counsels in attendance, two had read the terms of service and five the privacy policy of LinkedIn.  Simply stated, most consumers do not look at the terms of a web site.  Increasingly alarming, as Facebook learned, social media sites tend to be unaware of what their “App” vendors are doing.  Blending this issue with social media name squatting, underutilized technology to aid awareness of policies, and an under educated social media public; attorneys are finding it an arduous task to craft appropriate policies.

Reidenberg makes several technological and policy recommendations:

• If you are advising clients make sure you tell them to be transparent.  Use technology tools, e.g. popups or interstitial pages to make it clear to users information is being collected.  Ask, “Would a normal person be able to understand the terms and conditions?”
• Focus on substantive fairness, i.e. the “The Grandmother Test”, as a company, can you describe to your grandmother what you are doing, and do it with a straight face?
• Technology tools will be very important going forward.  Some of these exist, and some need to be developed.  For example, if you want your information to be deleted from a social media website, how to do this needs to be explicitly stated, but additionally the site needs technology tools to allow this to be automated.  Giving a user the rights to review and make adjustments to personal information will soon have to be the standard in the social media sphere.  Currently there is a disincentive for advertiser based companies to use these technologies because it decreases their revenue.
• General public education will have to be enhanced.  Companies need to focus on how to raise awareness about helping people, especially children, to understand risks.

Lastly here are some interesting concluding thoughts from Reidenberg:

Privacy Policies:  A Neilsen rating report stated that 78% of the public thought that if a website has a privacy policy; it means they do not share personal information.  This is not the case.  A policy could clearly state all the information a user submits is sellable.

Prediction:  Facebook and similar social media sites could potentially be a prime candidate of a class action suit.  As they continue to collect volumes of information from its users, it is possible to hold them subject to the Fair Credit Reporting Act.  The reason, Facebook is increasingly being used to screen employees.

Ultimately if policies are transparent, technology is utilized, and education is enhanced, companies can fully embrace social media as an effective tool to better their brand.