Privacy issues with social media marketing for small businesses

Insureon staff
Social media can be an invaluable marketing tool for your business. If you utilize social media, however, it is essential to be aware of the liability concerns that go along with it.
A woman using her phone with social media icons coming from it.

Privacy in the realm of social media is a major concern. One issue is how social media companies use the personal information they collect, including whether they sell it to other businesses.

So, what does that mean for business owners who use social media for advertising? Your clients and others who interact with your business on Facebook and similar sites have certain expectations of privacy, and it’s important to be aware of the rules regarding sharing client information. The worst-case scenario is your business being hit with a lawsuit for breaching a client’s privacy online.

If your business uses an online platform for advertising, you need to be mindful of how you share information that includes any reference to a customer, client, or employee.

Client testimonials

Client testimonials are a popular option for small business marketing and advertising campaigns. However, just because a client shares positive feedback about your product or service doesn’t mean you can reproduce it without permission.

If you want to share comments, a star rating, or any other feedback provided by a customer, you should get written consent to include it in your advertising.

Commercial use

Commercial use is when a name or image is used to sell or endorse a product or service. If you don’t have written consent in the form of a release to use someone’s name or image, you could be sued for a violation of privacy. The exception to this is if the person cannot be identified or recognized in a photo.

Misappropriation of likeness

A person can sue your business for misappropriation of likeness if you use a photo without consent or permission. The law considers it exploitation to use a person for commercial gain if you do not have permission from that person.

For your business to be liable for misappropriation of likeness, the person who was photographed would need to establish these elements:

  • Your business used the person’s name or likeness (or other personal attributes).
  • The name or likeness was used for commercial purposes (advertising).
  • The name or likeness was used without the person’s consent.

False light

Even if you have permission to use a photo, it must be in the context in which the person believed it would be used. If an ad conveys something deceptive or negative that offends or embarrasses the person in the image, you could be sued for portraying them in a false light.

Public spaces

In general, the law provides no expectation of privacy for something a person does in public. If the person can be seen from a public right-of-way, it’s legal to take a photo or use the person’s likeness. In other words, if a photographer takes a person’s picture coming out of a store onto a public street, that image could be in the public domain.

However, if there’s a photographer at a private party or event, the guests have an expectation of privacy because they’re not presenting themselves to the public.

Public disclosure of private data

Each person has a right to keep personal details private. That includes information about their health, sexual conduct, financial troubles, and anything else that seems private.

This can come into play in social media advertising when you reshare an item that a client, customer, or employee has put online, but not in a public way.

Facebook, Twitter, and Instagram have privacy settings that allow users to select whether their posts are publicly viewable or viewable only to select people. Reposting an item from an account that is open to the public would not be disclosing private data because the user has already shared it publicly.

But if a Facebook user writes a glowing review of your product – say, a hair growth product – and shows before and after images related to it, you cannot screen-grab and share that if it was only intended to be seen by a specific group of people. If the review is great and you would be thrilled to use it, ask the person for written permission first.

How social media privacy concerns affect your advertising

Advertising on social media can be an effective way to reach a larger audience and have ongoing engagement with users.

If you decide that you want to use customers as part of your advertising, consult a lawyer to draft an air-tight consent form for anything you share related to their experiences or likenesses. Anything you post under your business name, using your business account, or that’s related to your business could be considered advertising.

General liability protects you in a social media invasion of privacy lawsuit

Advertising injury protections in general liability insurance policies can protect small business owners from expenses related to social media and invasion of privacy lawsuits.

A policy will typically cover losses related to a settlement, litigation, and legal fees throughout the process. Insureon helps small business owners compare policies from leading US insurers with a free online application. Explore your options and get expert advice from one of our licensed agents.

Melissa Gold, Contributing Writer

Melissa is a contributing writer and accomplished editor with a combined background of legal, journalism, and digital marketing. She's experienced in translating technical and in-depth material into digestible, easy-to-understand content.

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