Social media marketing could be ticking time bomb

April 30, 2012
| By Pete Daly |
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A couple of federal court cases are receiving national attention because when they are resolved, one way or the other, “lawsuits will commence all over the country,” according to an attorney at Rhoades McKee PC in Grand Rapids. 

Alison Sleight said companies and individuals alike are waiting for the courts to provide a framework in the two civil cases, which hinge on who owns social media accounts that were set up for Edcomm in Pennsylvania and for PhoneDog in Northern California.

“These are two heavy hitters, so far, with regard to social media,” said Sleight.

Law.com reported in early March that there are believed to be cases in the courts involving LinkedIn, Twitter and Facebook. There has already been a similar situation in Grand Rapids.

It’s the rare company or active organization today that does not have some sort of marketing strategy involving accounts on Twitter, LinkedIn, Facebook, YouTube and blogs.

PhoneDog, a website providing news and reviews on mobile communication devices, asks its employees to maintain Twitter accounts for marketing purposes. In 2006, PhoneDog hired Noah Kravitz, who set up a Twitter account with the handle @PhoneDog_Noah. In late 2010, Kravitz left PhoneDog and changed the handle on the Twitter account to @noahkravitz, and he is still using that account. He alone knows the password, which he created, of course.

Kravitz was obviously a virtuoso when it came to using that account on PhoneDog’s behalf because it had 17,000 followers when he left the company.

“Not everyone is adept at social media marketing,” said Sleight.

Sleight said the danger to PhoneDog is that, if Kravitz joins a competing firm, he’s got access to 17,000 clients, and one post could suggest they all check out the competitor.

She said the value of that Twitter account might be comparable to the value that a company’s Rolodex once had, and in fact, PhoneDog is claiming the value of each of those Twitter followers is about $2.50.

“It does make sense that there is probably some nominal value (to each one),” said Sleight.

Last July, PhoneDog sued, claiming misappropriation of trade secrets and intentional interference with prospective economic advantage, among other things.

In the other case, Edcomm is a communication consulting and bank training firm, with Linda Eagle among the co-founders in the late 1980s. In 2010, Edcomm was acquired by another company, which kept Eagle on staff before eventually terminating her. The new owners, who had her LinkedIn password, logged on to her account and changed the password so she could not access it. Anyone searching for Eagle’s LinkedIn account was routed to a different LinkedIn page featuring the new CEO’s name and photograph, but still with Eagle’s honors and awards, recommendations and connections, according to court records.

Eagle was quickly able to legally regain control of her LinkedIn account, but the continuing court battle is revolving around who actually owns it.

Sleight said she has been involved in cases in which there was “a lot of discrepancy as to who thought what, and when.” Owners or key executives at an organization using social media should put their own name and e-mail address on those accounts, and then, “you have to assign an administrator.”

Sleight said she has heard that Facebook recently changed its policy, so that now “any administrator could delete all the other administrators.” That means, she said, that the owner of a company could be deleted from control of the Facebook account, should there occur some sort of breakdown in the employment relationship involving the employee who opened the account.

As a hypothetical owner of a business, said Sleight, “I could find myself locked out of my own Facebook account — and then how do you get it back?”

“It would be easier if there were social media policies in place,” she said, but research she has read regarding use of social media in the workplace indicates that about 76 percent of businesses use it to build brand and connect with clients online, but only 45 percent have a social networking policy.

“So there are a lot of people at risk of losing their accounts,” said Sleight. “People keep telling everyone to put lots of money into social media and build up your online brand, and it’s interesting that they don’t have a policy in place to protect that investment.”

Through Sleight, the Business Journal was referred to Chad Buczkowski, who said he was one of the shareholders in a defunct website called Grand Rapids Social Diary, which “at this point, is sort of an inactive company.”

Buczkowski said it was “sort of an e-magazine” that posted high-quality photographs of social events around Grand Rapids with written accounts of the events. GRSD also had a Twitter account and a Facebook page.

GRSD began in 2009 and lasted until the fall of last year, when a majority of shareholders voted to remove the managing partner who had helped set it up. Buczkowski said he is now the managing partner.

“We did initially have to retrieve all the social media accounts,” he said, which had been given passwords and overseen by the previous managing partner. When removed from that role, that person “immediately changed the passwords so that we could not access them,” according to Buczkowski.

He said there is no ongoing litigation but that the Social Diary shareholders had to use Rhoades McKee to contact the legal departments at Google and Facebook to try to recover their passwords and control over those accounts.

Before their representative at Rhoades McKee attempted to reach the legal departments at those companies, Buczkowski said the GRSD shareholders “were told there would be a slim chance” of success in regaining complete control of the social media accounts.

“We ended up not getting our GRSD Facebook page back, just our Group page. And, even though Google returned our e-mail address, they were unable to restore any of the deleted three-years’ worth of e-mails, except for 120 or so useless ones,” Buczkowski said.

He offered this advice to other organizations, regarding social media communications: “You do need to make sure you have set policies and procedures and checks and balances in place. If you don’t have those, then you may get into a legal situation.”

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