Monthly Archives: February 2011

Know Your Enemy-Managing Online Reputation Involves More Than Just A Lawyer

Reputation has become an increasingly significant and increasingly fragile proposition in the age of social media, with brands and individuals being “made” and “broken” in the click of a mouse. It’s possible that you’re reading a pdf of this article on your iPhone, Blackberry, or other smartphone, which tells the story of the seismic change in the way we communicate and form opinions in the 21st Century – in the mid-90s and the wake of the dot.com bubble bursting, it may have been easy to think that the world wide web may not quite be the panacea that many predicted and that the voice of the web community would never carry far enough to be concerned with.

What a difference 15 years make. Although still an ecosystem which tends to boom and bust, the web has produced the world’s youngest billionaire in Marc Zuckerberg – owner of Facebook which as of February 2011 has 600 million users and was recently valued at $50 Billion. Google has become a household word and for many the gateway to the web, recently valued at $192 billion. Even Twitter, which is still developing its long-term business model, has been valued at $10 billion.

Businesses like these have changed how we consume news and opinion, mainly because, along with other online and social media platforms including blogs such as WordPress and the continuing evolution of print media into a new internet-based experience, any opinion is now easy to publish online and distribute to a potentially world-wide audience. That opinion then has a far better chance of making its way onto respected sites and even eventually into the wider media for one main reason – there is now far more “column” space to fill.

“Citizen Journalists” are increasingly feeding news from within Iran during the 2009 elections or from within Egypt during the collapse of the Mubarak Government. Not all of their content is benign, however, and the “democratisation of content” has also arguably led to a “democratisation of complaint”, not all of it justified.

A recalcitrant blogger or tweeter is not always an easy issue to deal with. Ask Dell – in 2005, anyone searching for the electronics giant online would have been easily directed to the “Dell Sucks” blog, set up by journalist Jeff Jarvis after a particularly bad experience with his laptop and a worse follow-up by their customer services team. For some time, anyone searching for Dell found Jarvis’ blog at the top of Google’s rankings and the experience ultimately forced a change in Dell’s business model after the launch of ideastorm.com – a website asking for ideas from their stakeholders on what the company should offer. Since then, Dell claims to have made over $6bn through Twitter alone; a far cry from a time they referred to as “Dell Hell”.

Online defamation is, therefore, not an easy crisis to manage, and occasionally there’s only so much that the law can do for you if online comments affect either your own or your business’ reputation. That said, a combination of knowing what options are available to you and having a “joined-up” PR and communications strategy can keep a momentary crisis from turning into a long-running drama.

Firstly, you’ll need to decide whether or not the content, allegation or statement in question is “defamatory”. The usual test is whether it “lowers you in the estimation of right-thinking members of society” – practically speaking, the content needs to make a “man in the street” think less of a Claimant or “expose them to ridicule”.

Then, you’ll need to know your enemy. The web can be an easy place to hide, so identifying the defendant is not always straightforward. If the comment in question is made on a website or via the online version of a national newspaper, then identifying a defendant and making a decision as to whether they can pay your costs if successful is easy. Even if they are anonymous (at least at first) and a website or platform refuses to disclose their details, Claimants can apply for a “Norwich Pharmacal” or “Motley Fool” order where a third party can be forced to disclose information in relation to a third party’s involvement in suspected harmful activity, which will include defamation. However, these orders are not always granted easily and can’t be used as a “fishing expedition” – they must usually be used (for example) to either identify a defendant, the full nature of their activities and to allow the Claimant to plead their case and even then will only usually be granted where the target is likely to have the relevant information or have been involved in the wrongdoing.

Recent cases have seen the Court find that as blogging is a “public activity” and rejecting an attempt by the Times to deny disclosure on the grounds of privacy (The Author of a Blog v Times Newspapers [2009]. However, where the bloggers in question have only posted messages of a more “trivial” nature, the Court may be more reluctant to disclose their identity and the recent case of MediaCAT v Adams et al. [2011] shows that it is more important than ever to approach a Norwich Pharmacal application with a decent case. MediaCAT dealt with the now-infamous peer-to-peer illegal downloading cases brought by ACS Law, with Judge Birss finding that, given that the Defendants could not be proven to have been liable for the downloads in question, future orders should be more closely scrutinised and effectively managed after grant.

So, once the Defendant has been identified, where next? After careful consideration of the expense and technical complexity involved in a libel claim, the first step is usually to send a “Letter Of Claim” under the Pre-Action Protocol on Defamation cases to put the case without the expense (at least in the early stages) of Court Proceedings. What happens, though, when the Defendant is based outside the UK?

Serving proceedings outside the UK is dealt with by the Civil Procedure Rules, but the UK libel regime is fairly unique in the sheer breadth of cases where the defamatory comment in question is made outside the UK and published on the internet it is willing to consider. The landmark case of King v Lewis [2004] established that a claim against a US website could be heard in the UK due to the fact that the defamatory comments in issue could be read by UK users and that Don King had a significant reputation in the UK.

The availability of “Forum shopping” has always meant that if libel cases can be fought in the UK, they often are due to the comparatively high awards in damages and costs that the High Court may be willing to make. Since the 1995 case of Shevill v Presse Alliance, in which the Court was willing to hear a libel dispute with French Magazine L’Express even though it had only distributed five copies in Yorkshire, London has been the unofficial “libel capital of the world”.

That may now be changing, however, in the light of the February 2011 case of Dmitry Firtash v The Kiev Post, where a Judge found that the case’s connection to the English Court was “tenuous in the extreme” after only 21 users were shown to have viewed the page in question, which had been blocked from UK users almost immediately. The Court declined jurisdiction and although this case is very recent, it may mark the beginning of a move away from the internationally-maligned “libel tourism” which the Coalition Government has already announced plans to rule out.

Even if the case is strong, the potential monetary and reputational damage worth pursuing and the Defendant traceable, the fact is that ongoing publicity surrounding internet defamation claims often make them as much an exercise in reputation management as the legal basis for the claim in the first place. It may be straightforward to shut down one blog containing negative commentary, but the nature of the internet means that the content may well then appear on other sites. What starts out as an action against one blogger can turn into a war on many fronts, and one which isn’t easy to win. Corporate claimants can easily find themselves accused of trying to stifle public debate over the accusations in question, and going after every duplicate “publication” of the defamatory content can be very expensive. A further major issue is that blog content may be picked up by search engines for some time after the original statement – the recent case Metropolitan Schools Ltd v DesignTechnica & Google [2009] found that Google cannot be held liable for search results which are themselves defamatory or link to defamatory website content.

Even if dealing with Defamatory content is not always easy, removing it in the short term may well be. In particular, ISPs and websites can only take advantage of the intermediary “innocent dissemination” defence in section 1 of the Defamation Act 1996 if they had no direct control over the content in question, took reasonable care in respect of its publication and had no reason to believe that their actions would lead to further publication of the defamatory material.

The defence is lost however, along with equivalent protection under the Electronic Communications Directive (2002) for “mere conduits” and “hosts” if, when notified of the content in question, the ISP, website or platform removes it immediately. In practice, many third party sites and ISPs tend to “take down first and ask questions later”. Although this may be very effective in the short term, keeping an eye out for the content appearing somewhere else will then be essential. One way of getting negative content further down search results is through effective Search Engine Optimisation and releasing as much content as you can as soon as possible.

If you are dealing with online defamation through either a website, video clip, tweet or Facebook post, then it’s best to put your crisis management team together as soon as possible and understand their roles. Lawyers can advise on what content is actionable and whether or not there are other ways to remove it without heading to Court (in particular, by relying on the site or social network’s own acceptable use policy or forum rules to force removal without having to fall back on a harsher “Letter Of Claim”), the Comms and PR Team will advise on how to engage with your stakeholders to communicate around and even through the problem and an SEO specialist can advise on how to manage the appearance of content on the web.

With the right management, even the worst content can become old news very quickly and even anonymous “Lone Gunmen” can be held to account. The conversation online may go on without you, but the conversation around how to influence online commentary has to go on with you.

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All Sorts Of Advertising-Online: New ASA Remit Covers Online Ads From 11 March 2011

From 1 March 2011, the Advertising Standards Authority will regulate all advertisement online as well as in print media including, for the first time, “marketing messages” on companies’ own websites and on non-paid-for services under their control, including social media platforms such as Twitter, Facebook and LinkedIn.

Online advertising is a big and growing business, increasingly influential given the sheer amount of time that we all spend on the web, the ease in which we can click on a link if we actually want to purchase the product or service in question and easy to quantify in terms of return on investment; the trend appears to be that online advertising is better value for money. Previous figures suggest that the public has been making a steadily-increasing number of complaints against websites which the ASA would not previously have been able to deal with due to being outside of their remit, but all that is about to change.

From 1 March 2011, the ASA’s UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (“the CAP Code”) will apply in full to “marketing communications connected with the sale or transfer of goods or services online”, regardless of the size of the business in question or the sector in which it operates. So, any complaints over misleading advertisements for (by way of example) a flight abroad which costs significantly more when paying than it does on the airline’s homepage may well lead to them being withdrawn.

The definition of “marketing communications” is significant in itself, as it includes material on a business’ own website as well as communications on platforms that they don’t pay for but do control. This means that marketing communications on Twitter, Facebook or any other social network will now be covered by the CAP Code and can be subject to sanction by the ASA. Social network comments can even be covered even if made by private individuals when the business in question adopts them as a “marketing communication”, although the average positive comment quoted on a homepage will usually not fall under the new rules.

The ASA is sometimes seen as a little toothless in that the sanctions it can impose for advertisements which fall foul of the CAP Code don’t include the ability to award damages to a complainant. There are, however, other options open to them which tend to produce a high level of compliance, such as denial of advertising space to repeat offenders and the publication of upheld complaints by way of the adjudication process.

The new sanctions available under the ASA’s digital remit have more bite than bark and may well reach a much wider audience than tend to read their adjudications – if a “marketing communication” on a website falls foul of the ASA’s CAP Code, then the business responsible can now be subject to an enhanced “name and shame” policy via the ASA website (which may well show up at the higher end of search results when published), the removal of paid and “sponsored” search results that link to the advertisement in question (affecting SEO strategy and general online visibility) and an appearance in the ASA’s own paid-for advertisements on search engines publishing the details of serial offenders. Even though the ASA system relies on self-regulation, search engines have already indicated that they will co-operate with the new rules, which could make the new sanctions much more powerful.

Online Advertisements should now be drafted with an eye towards the CAP Code – complaints to the ASA are sometimes harder to dismiss than the member of staff who posted them. The Code itself aims to make advertisements honest, decent, truthful and legal and contains specific guidance on content and complaints can be made by anyone, whether members of the public or rival businesses; many adjudications centre around the cosmetics industry, with L’Oreal being recently found to have exaggerated claims as to the length of cosmetic eyelashes and Argos found to be in breach over claims that they could deliver to their customers at a time convenient to them. Both advertisements were withdrawn.

There are some exceptions – press releases and PR material will not be covered, nor will editorial content and “natural” (i.e. not paid-for) appearances in search results and on price comparison sites. That said, there are some basic steps which businesses can take to get closer to compliance, including employee training, active management of sites and campaigns and making use of the ASA’s own “CopyAdvice” service, but the best thing to do is take advice as soon as possible and, if in any doubt is to remove the advertisement.

Although it’s argued that the web is still relatively lawless, this is a clear example that laws applicable in the offline world apply equally online. The online world tends to contain some very loud and active voices, and news of an advertisement which is found to have been “misleading” under the CAP code can spread worldwide at the click of a mouse. Even though news of ASA involvement may fade away like any other blog post over time, details on the web can still remain on search engines for some time to come and prevention through compliance is far better than a cure involving spending time and money on PR and search engine marketing. Misleading advertisements may now force your business to well and truly “pay per click”.

Comment Is Free-OFT crackdown on Celebrity Twitter Endorsements

Celebrity endorsement of a product or service is nothing new, but in the evolving world of Social Media, it’s a brand new way for the rich and famous to make themselves and their commercial partners even richer. In the US, Tweeting for sale is already an industry in itself, and it’s a big business – reality TV Star Kim Kardashian and rapper Snoop Dogg are amongst Twitter’s top celebrity earners, with Kardashian reportedly earning up to $10,000 for sending a single Tweet to endorse a product.

Although the law in the UK on Celebrity Tweeting is not as clear as in the US, where the Federal Trade Commission developed guidelines which state that a celebrity Tweet endorsement must contain the words “ad” or “spon” to show that it’s been paid for, this may all be about to change.

In the first case of its kind, the Office of Fair Trading (OFT) has taken action against Handpicked Media, a Public Relations and Marketing consultancy who was found to be paying Bloggers to write reviews or endorsements of their clients’ products, ordering them to clearly state when any comment has been paid for.

“It didn’t take long for Social Media to become a very effective advertising platform, and for Celebrities to embrace the commercial possibilities of lending their name to products in less than 140 characters. Given that Twitter in particular creates a very direct connection between the “Twitterati” and their fans, it can be a very powerful advertising platform. This is why the OFT has taken action against Handpicked Media, who have already agreed not to “engage in promotional activity unless bloggers within its network prominently disclose that the promotion has been paid for”.

The idea of “Flogs” – fake Blogs or Tweets written from the Consumer’s point of view but either created or paid for by marketers has been around for a few years now. Research shows that Bloggers and Users of Social Networks are increasingly Tweeting about brands and businesses to make their opinions known. If the opinion’s good then it’s potentially worth a fortune as genuine and very quantifiable “word of mouth”, which tends to travel very far and very fast.

That is, of course, if it’s genuine. Sony were one of the first to experience a backlash at the end of 2006, when the ‘All I Want For Christmas Is A PSP’ viral campaign was exposed as the product of a ‘consumer activation’ firm. Gamers were not impressed, and took to YouTube to post their own negative video messages about the campaign.

As the OFT’s action shows, “flogging” and, by implication, misleading Tweets are a criminal offence under the Consumer Protection from Unfair Trading Regulations 2008. Regulation 3 refers to “unfair commercial practices”, which it describes as any which “contravene the requirements of professional diligence; and materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.”

One practice that’s explicitly listed as being unfair is “falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.” The statutory maximum fine is £5,000, but in more serious cases of a breach of the regulations the maximum sentence is two years’ imprisonment. However, prosecutions can only usually be brought within three years of the date of the offence.

As yet, there have been no actual prosecutions under the Regulations and it’s important to note that this case hasn’t led to a conviction, but the action taken against Handpicked Media shows that the OFT is not afraid to step in where it needs to.

The Marketing and Advertising Industry is arguably learning that fake blogs don’t generate a real return on investment, but a celebrity Tweet can be priceless. Range Rover recently enlisted 40 celebrities (including Daisy Lowe and Ben Shepherd) to drive a new model and then Tweet about the experience. Fashion designer Henry Holland seemed pretty unequivocal: “CAN’T WAIT FOR MY NEW RANGE ROVER..!!!”. Lily Allen and Peter Andre have also jumped on the bandwagon and Estee Lauder ‘s products have regularly tweeted about by Liz Hurley, who has been the “face” of the company since the mid-90s. That fact is strangely missing from her profile.

The OFT’s next step will be very interesting to watch. Although the Advertising Standards Agency’s CAP Code (which will apply to online advertising and Social Media content from March this year) states that advertising must be truthful, not misleading and capable of being substantiated, the penalties for non-compliance are nowhere near as severe as those under the Consumer Protection from Unfair Trading Regulations.

Unless a celebrity brand advocate makes it clear that they’re being sponsored to have a high opinion of a product or service, there’s every chance that they may well be misleading the public by covertly endorsing it. Although the vast majority of Twitter users will be perfectly able to tell when they’re being sold to, protecting vulnerable consumers is something the ASA and OFT take very seriously. Marketers may now have to factor in the cost of defending a prosecution into their ROI, and you can bet that the average Celebrity Tweeter won’t be willing to fund it for them.