Germany: New Opportunities, New Risks, Old Regulations: Social Media Poses Several Hurdles For Enterprises

Last Updated: 16 April 2012
Article by Georg Lecheler

Social Media Poses Several Hurdles For Enterprises

Social media offer enterprises many new opportunities of communicating with stakeholders, especially with customers in the B2C business. However, in the euphoria it is all too common to overlook the new legal risks that are also associated therewith. Lacking specific "social media" laws, enterprises wishing to communicate in a legally admissible manner must tackle the issue by addressing the legal situation for communicating via "traditional" media. There are numerous hurdles: for example in employment law, when a company monitors its own employees or checks out potential employees, in data protection law, or with respect to the content of corporate communications.

Corporate communications ultimately always have one goal: advertising – for employees, customers, suppliers, investors, public opinion. Advertising, be it in print form, by television, radio or in the form of word-of-mouth advertising, is governed by certain regulations, inter alia the provisions of the German Act Against Unfair Competition [Gesetz gegen unlauteren Wettbewerb, UWG]. According to the Act, for example, surreptitious advertising is prohibited. This includes bought or, to put it more mildly: sponsored, blog articles. Around the beginning of the year the Regional Court [Landgericht, LG] of Hamburg confirmed this to a legal protection insurance company, whose IP-address could be allocated to a conspicuously positive comment in a blog about this type of insurance.

But what about cases where a comment has not been paid for at all, but where an employee, perhaps from a computer at work, just wanted to comment on his personal experience with his employer? After all, an increasing number of enterprises are allowing (and encouraging) their employees to use social media, also during work hours. A prohibition outside of working hours is not possible in any event.

Enterprises are also liable for violations of the law by its employees and agents: above all, they face the threat of warnings, declarations of forbearance subject to a penalty or interim injunctions, lawyers' fees and court costs. Enterprises are increasingly issuing their employees guidelines for all – private or work-related – use of social media. Their contents are mostly confined to tried and tested principles: stay friendly, professional, honest, stick to verifiable facts, offend no-one, obtain rights to pictures and texts, put yourself in the position of the person concerned, in case of doubt – hold your tongue.

It is more important that enterprises are aware of the key features concerning the structure and mentality of Web 2.0, for example: I am being talked about even if I do not want this. The reaction of the network community is a typical new risk of social media: If you stir up an advertising wind then you may well end up in a "shitstorm" as was recently the case with the ING-DiBa, whose meat-loving advertising icon Dirk Notwitzki antagonised vegans on the internet. Although the bank reacted calmly, general rules should also be established and communicated to the employees for cases such as this.

Several legal tools are fundamentally available to enterprises for preventing statements on the internet and for holding the responsible parties to account, above all warning letters and interim injunctions. However, the operators of some internet sites are too difficult to reach in order to enforce these rights. And even if this is possible, the network community's reaction can be devastating – the accusation of censorship is quick to arise; legal proceedings are often taken as even better grounds for further comments.

Hence, the extent to which legal proceedings make sense will always have to be appraised by cautious enterprises in an individual case, also with respect to their communicative effect. Coordination between legal and communications departments is therefore more important than ever. Social media have literally accelerated this necessity even further – for time is often the critical success factor on the internet.

Georg Lecheler is a lawyer and junior partner of the law firm of Oppenhoff & Partner. He advises enterprises on matters of intellectual property law, unfair competition law and copyright law. He is a member of the law firm's social media practice group, which advises on all pertaining legal aspects. Inter alia, its lawyers assist in the development of strategies for handling social media and in the drafting and implementation of social media guidelines.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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