The English common law understood something of commerce, but did not anticipate the complexities of the modern, publicly traded corporation with its responsibilities to shareholders, employees and regulators. As corporate law evolved, the law often gave corporations “personhood,” that is, bestowed upon corporations human attributes and behaviors as a way of understanding and regulating them. Joel Bakan, in the book and movie The Corporation, maintains that corporations are people, but their behavior is psychopathic. This may a bit extreme in the typical corporation, but it helps to understand why corporations, and the people in them, behave they way they do. At the top, the corporation is driven by revenue, growth and profitability. These are the things Wall Street wants. Senior executives are measured, compensated and sometimes fired on the basis of these measures. Amongst the rank and file, the typical managers and individual contributors, performance management, the process of ranking all employees based on their performance and value to the company, drives similar behaviors. If an employee, for example, runs one of the company ’s advertising programs, he/she might hear of a new method for improving the number of consumers who respond to an ad. The employee will be driven by the need to meet the goals of the performance management plan, and not primarily by ethical considerations. After all, employees who don’t measure up, will not be considered for raises and promotions, may be the first selected when there is a layoff, and may find themselves “managed out” of the company. Ultimately, people may be faced with decisions that require choosing between ethical behavior and behavior that will go toward helping them stay employed (feed, house and clothe their family). And in most corporations, there is no incentive for ethical behavior.
Facebook continues to commit gaffes in the area of privacy. In one case, Facebook users launched a weak revolt, creating Facebook pages and posting status updates urging users to close their accounts in protest. By most estimates, only a few hundred thousand users did so. At the time, Facebook has 400 million users, so even a loss of a million users would represent just .25 % of all users, and would not inflict noticeable (financial) harm on Facebook.
Here is the text from the 2009 Facebook privacy agreement that users found most objectionable. Note that it requires the user to grant Facebook license to all of their content, and that even if they close their account and/or remove the content, Facebook will keep archival copies.
http://www.apple.com/legal/privacy/ If you have an iPhone, you might have been presented at one time or another with an updated user agreement. These are often close to 100 pages long. This language appeared on Apple ’s general privacy agreement on its web site on June 21, 2010. It allows Apple to share users’ previously private location data with Apple business partners.
Mashable: Tipster Trey Copeland wrote to us with a link to results for the search: site:blippy.com +"from card". That search returns results showing detailed purchase information for transactions. Each result highlights that there was a "debit card transaction" or "card transaction," the amount spent, the specific location (address included) and the full card number. CNN Blog: After an incident last week in which at least five Blippy users' credit card numbers were made public "due to a technical oversight," the website's CEO said Monday that he is enacting security measures to keep that from happening again. Blippy CEO Ashvin Kumar writes in a blog post that he expressed "sincere remorse" to eight of the site's users whose sensitive information may have been compromised. He plans to keep that from happening again; he says Blippy will: 1. Hire a chief security officer and associated staff that will focus solely on issues relating to information security. 2. Have regular 3rd-party infrastructure & application security audits. 3. Continue to invest in systems to aggressively filter out sensitive information. 4. Control caching of information in search engines. 5. Create a security and privacy center that contains information about what we are doing to protect you.
Scott McNealy, former CEO, president and chairman of Sun Microsystems, had a different philosophy on privacy. He said, “You have no privacy. Get over it.” He was referring to all of the people we provide our information to, our date of birth, social security number, driver’s license number, etc. We have given away so much information and the holders of this information are often incompetent or unscrupulous. Laptops full of private information have been stolen. Huge databases have been hacked. Privacy is fleeting, or maybe, imagined. http://articles.sfgate.com/2003-09-14/business/17508716_1_mcnealy-joy-vinod-khosla-greg-papadopoulos-bill-joy-sun/5
The Federal Trade Commission (FTC) has finally stepped up and issued new regulations affecting commercial use of social media. Specifically, the agency now requires bloggers to disclose relationships with sponsors, whether the blogger is paid or merely receives “free” products and services; and for celebrities to disclose their paid relationships with sponsors. The FTC’s updated Endorsement Guides (PDF) define those circumstances under which disclosure must be made, removing what many thought were gray areas of the law. The new rules went into effect December 1, 2009, and violators can be fined as much as $11,000. The pending changes to the guidelines have been made available for public comment for some time, and were discussed in detail by J. Thomas Rosch, Commissioner of the FTC, in a talk (PDF) given June 25 in Washington, DC. The new regulations include extensive examples of situations that require disclosure, and recognize the difficulty of regulating social media given that endorsements and testimonials may not come from the company or its employees, but from individual consumers. “ An advertiser’s lack of control over the specific statement made via these new forms of consumer-generated media would not automatically disqualify that statement from being deemed an ‘endorsement’ within the meaning of the Guides. Again, the issue is whether the consumer-generated statement can be considered ’sponsored.’” The FTC also recognizes, for example, “the ‘near-endless’ variety of possible relationships between bloggers and the companies about whose products they blog.” The new Guides document is 81 pages long. For a briefer and more readable discussion by the FTC of the challenges it faced (and the process it followed) drafting these new regulations, check out Rosch ’s speech (PDF), which includes this example. “ an advertiser hires a blogger to test out and then review a new body lotion. The advertiser does not make any specific claims about the lotion’s ability to cure skin conditions, and the blogger doesn’t ask the advertiser whether there is any substantiation for such a claim. Yet, in the online review, the blogger writes that the lotion cures eczema and recommends the product for that condition. Under the facts set forth in new Example 5, both the advertiser and blogger would be subject to liability for false or unsubstantiated statements made by the blogger’s endorsement.” “ Payola,” which transformed into blogola with the rise of social media, is one of the most difficult to detect, difficult to define forms of online consumer deception and some would argue, thought not I, that there is nothing wrong with some of the current practices whereby sponsorships are not disclosed. I believe the FTC has done a good thing defining which practices are acceptable, which are not, and who is responsible for a breech. Removal of all of these mysterious connections between sponsors, bloggers and celebrity endorsers is absolutely required for social media to reach its absolute effectiveness as a corporate marketing tool.
The European Union ’s Unfair Commercial Practices Directive enacted in May, 2004, already bars companies from “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” which could certainly seem to cover and other social media sins. EU regulations affect all companies doing business in the EU, regardless of the location of the company’s headquarters. http://europa.eu/rapid/pressReleasesAction.do?reference=IP/04/658&format=HTML&aged=0&language=EN&guiLanguage=en
Hoping to pre-empt the FTC and other regulators, consumer companies have formed the Future of Privacy Forum and introduced this symbol to alert online consumers when, how and why their private information is being shared. The icon would automatically appear on a company ’s site when an information exchange takes place, such as Facebook sharing your information with Yahoo, and allow consumers to click to find out more. I have not seen this icon anywhere, but I am always hopeful and encouraged by efforts to inform consumers. Keep in mind of course that self-regulation isn ’t always effective. For more details, see the New York Times http://www.nytimes.com/2010/01/27/business/media/27adco.html
Here is my Social Media Love Manifesto, which I wrote and put in a wiki after I found myself being combative and aggressive when responding to other blogs and leaving comments on other blogs. It has thus far proved a dismal failure.
Here are a few privacy and ethics resources that I have found useful.
• Understand the Medium Social media is unique in online marketing. Unlike the static web site, a blog or community allows users to create content. Commenting capability allows online “conversations” but can sometimes degrade into schoolyard name-calling. Certain sites use private data to provide enhanced services. The etiquette in the social media/social networking world is complex. In order to design effective social media programs, it is critical to know as much as possible about the medium. • Respect Privacy Underlying social media is the ability to share personal data and to use it to find others with similar interests, professions, backgrounds, etc. Users trust companies and organizations to only use their data in ways in which they have been fully informed and have approved. Facebook in particular continues to make mistakes in the administration of its privacy policies, resulting in a loss of consumer trust. • Identify Yourself Let people know your name and company name in your social media activities. Include this information in your Twitter profile and on your Facebook page, YouTube channel, etc., so that they know you represent the company, and they know who you are, so that you are personally identifiable and accountable. • Tell the Truth There is no percentage in lying. The truth is out there. People respect organizations that tell the truth, even when it ’s not flattering, and by contrast, they dislike companies that get caught being deceptive. Failing to tell the truth can damage a company’s reputation and create a scandal that lives on much longer than the sting of having to tell an uncomfortable truth. And being untruthful can be illegal, exposing the company to possible monetary penalties. • Disclose Affiliations There ’s nothing wrong with earning money as an affiliate marketer (getting paid to refer people to another company’s web site, for example), or by being paid to endorse a company or its products and services. That’s a part of how business is done. It is wrong, however, to do so online without disclosing your relationship with another company. It’s also prohibited by the FTC endorsement rules mentioned earlier in the presentation, and could result in a fine as high as $11,000. • Protect Reputations It is important for a company to behave in a way that protects its reputation. This means that the company must conduct itself honestly, ethically, legally, and with the best interests of its customers, employees, shareholders, and the environment in mind. Any social media communications or initiative should be conducted with this in mind. Ask yourself, does this have the potential to harm our reputation? The reputation of our customers? Our business partners? Consider these things before you communicate. Once an initiative has turned into a problem, it is impossible to maintain a company ’s reputation after the fact, and companies that do conduct themselves appropriately, need never try to spin the story when they are caught behaving in an inappropriate way. I attend a regular lunch of veteran corporate communicators and PR people. We were sharing ethics case studies and all agreed that the last thing we would ever want is for one of our companies/clients to become a business school case study. Don ’t let it happen to your organization either. • Do the Right Thing The best time to deal with ethical concerns is when a social media program is in its formative stage. If you ’re developing a social media program or plan, check it thoroughly for possible ethical situations. Is it legal? Does it comply with company policy? Is it fair to consumers? Does it involve something new, like the use of a new kind of technology, that might require additional insight from corporate counsel? Don’t let inappropriate strategies and marketing techniques creep into your plan. When they are kept out at the beginning, it reduces the messes that will have to be cleaned up later. • Be Kind Be nice to people in all of your online interactions. It ’s just as easy to be kind as to be arrogant or mean-spirited. Recognize that people are entitled to opposing points-of-view. Extend and extra courtesy. Spend a little more time than needed providing customer service. Replace something no longer in warranty. Listen to consumers. Don’t slam competitors. Make the world a better place. It’s not only a good thing to do for the world, it’s good for your brand. People will see you do this, as they have seen other leading companies who truly understand social media, and they will gain affinity for your company. Many of them will purchase from you, and recommend you to friends. • Know and Follow the Law Know and follow online marketing law, particularly that set by the FTC and COPPA. To not do so exposes the company to legal risk, and reputational risk, and of course any initiative built on a faulty legal foundation will be a failure. Another reason to know the law is so that when you take a stand, you are doing so from a position of knowledge and power. Ethics is a difficult subject with many interpretations, but to some people, the law is more exact. When urging others to behave ethically, knowing applicable law may be the strongest persuader you have. • Take a Stand We ’re still in the early days of social media, so some of the people in your company designing social media programs may not be fully informed when it comes to social media ethics and law. If you hear something that bothers you, or something you jus know is illegal or unethical, you may be the only gatekeeper preventing the company from embarking on poorly conceived venture. You may have to speak up. Speaking up isn’t confrontational. You don’t have to mention your concerns in front of a large group, and don’t assume the role of social media ethics champion. But you could take someone aside or give them a call and let them know your concerns and suggest they look into the issue. You could offer to document your concerns. And if it’s important enough, you might have to go up the chain of command to be heard.
Do Good to Be Good
doing good by being good Universidade Católica Portuguesa Formação Avançada em Media Sociais April 24, 2012 Joel PostmanCopyright 2010 – 2013, Joel Postman & Socialized PR
By law, the corporation is granted “personhood.” But what if that person is a psychopath? WHO Characteristics of a Psychopath • Callous unconcern for the feelings of others • Reckless disregard for the safety of others • Incapacity to maintain enduring relationships • Deceitfulness; repeated lying and conning others for profit • Incapacity to experience guilt • Failure to conform to social norms with respect to lawful behaviors.Copyright 2010 – 2013, Joel Postman & Socialized PR
root cause: performance management • 20 – 70 – 10 rule • reward top performers • retain “vital 70” • manage out “bottom 10” • measure performance Jack Welch Chairman and CEO of General Electric 1981 to 2001Copyright 2010 – 2013, Joel Postman & Socialized PR
Facebook: putting commercial interests ahead of consumer privacy • Lawsuits in Rhode Island and California allege Facebook and Zynga illegally sending Facebook user IDs to third parties – Oct. 2010 • Facebook settles Beacon dispute for $9.5M – Dec. 2009 • Facebook changes privacy agreement, then reverts some changes after consumer pushback (not) and suit filed by EPIC – Feb. 2009 • More: http://epic.org/privacy/facebook/Copyright 2010 – 2013, Joel Postman & Socialized PR
"You hereby grant Facebook an irrevocable, perpetual, non- exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings.... You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content.”Copyright 2010 – 2013, Joel Postman & Socialized PR
FTC releases blog endorsement rules • Addresses bloggers who have relationships with advertisers • The FTC recognizes “the ‘near-endless’ variety of possible relationships between bloggers and the companies about whose products they blog.” • Also covers celebrity endorsements • 81 pages of regulations and examplesCopyright 2010 – 2013, Joel Postman & Socialized PR October, 2009, http://www.socializedpr.com/ftc-endorsement-guides-define-fair-social-media-practices/
EU banned astroturfing a long time ago The European Union’s Unfair Commercial Practices Directive bars companies from “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”Copyright 2010 – 2013, Joel Postman & Socialized PR
• Hoping to pre-empt the FTC, the advertising industry developed a privacy icon and campaign • Will be used to let consumers know why they are seeing a certain ad • Developed by Future of Privacy Forum, whose members include Microsoft, Yahoo, Google, Procter & Gamble and General ElectricCopyright 2010 – 2013, Joel Postman & Socialized PR http://www.nytimes.com/2010/01/27/business/media/27adco.html
I have therefore resolved that any time I am using social media, such as writing on my blog, updating on Twitter, or leaving a comment on someone elses blog, I will: •Base my comments on the facts, and make reasonable efforts to gather all relevant information before participating in any discussion •Weigh carefully the value of any comments I choose to make against the potential for harm •Use logic, persuasion and rhetoric, and not personal attacks, to state my case •Exercise sensitivity and awareness when discussing topics such as race and religion I will not: •Make assumptions about people’s motivations. •Generate controversy for its own sake. •Join others by thoughtlessly “piling on” when someone is under attack I will always strive to: •Treat people online with the respect and kindness I would extend to a friend or professional colleague. •Take time regularly to leave a supportive comment on a blog or acknowledge someone positively in a public forum.Copyright 2010 – 2013, Joel Postman & Socialized PR
Ethics & Privacy Resources • Childrens’ Online Privacy Protection Act (COPPA), protects children under 13 http://www.coppa.org/ • Word of Mouth Marketing Association (WOMMA) Code of Ethics http://womma.org/ethics/code/ • Electronic Frontier Foundation (EFF) http://www.eff.org/issues/privacy • Electronic Privacy Information Center (EPIC) http://epic.org/Copyright 2010 – 2013, Joel Postman & Socialized PR
• Understand the Medium • Respect Privacy • Identify Yourself • Tell the Truth • Disclose Affiliations • Protect Reputations • Do the Right Thing • Be Kind • Know and Follow the Law • Take a StandCopyright 2010 – 2013, Joel Postman & Socialized PR