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4 Facts About Social Media Law Your Business Must Know


Social media might provide free platforms to connect with your target audience, but the networks are heavily regulated. If you want to run a competition or endorse a product via an influencer, you must avoid marketing mistakes that could land your business in big trouble.

Don’t put a foot wrong online. Instead, read these four facts about social media law that your business must know.

Fact #1: There are National and Regional Laws for Giveaways

Before your company promotes a giveaway on its social media pages, you must familiarize yourself with the national or regional laws for contests and promotions. Many companies have received huge fines for violating the strict laws, which will have impacted their finances and reputation. 

Contests, sweepstakes, and lotteries each have different rules companies must adhere to online. Bear in mind that while the United States has general laws to follow, each state will have individual regulations to follow. Therefore, you might need to prohibit a contest to a specific location, such as New York or California. 

Once you have a firm understanding of national and state law, you can then start fleshing out your giveaway. Next, integrate a giveaway bot into your company’s campaign, which can make the entry process a breeze, improve engagement, and provide participants with additional ways to win.

Fact #2: Influencers Must Disclose Endorsements

The Federal Trade Commission (FTC) now requires companies and influencers to disclose endorsements, which will prevent them from misleading social media users. If your company pays an influencer or sends them a gift to promote a product or service, they must state they are participating in a paid ad.

If they fail to do so, your company could face a huge fine. For example, the FTC fined a detox tea company one million dollars, as the likes of Cardi B and Jordin Sparks failed to disclose they were participating in a paid endorsement.

Fact #3: You Can’t Stop a Customer Posting a Bad Review

The likes of Facebook and Yelp allow its users to share reviews on the platforms, which can help others make an informed decision based on their experience. However, while your brand might be eager to avoid negative reviews that can harm its ratings and reputation, it cannot stop a customer from posting a review. 

In a consumer contract, you cannot state that a customer cannot write a negative review about your brand online. Also, California has introduced a law that prevents businesses from penalizing customers for harmful reviews or critical comments. If your business violates this law in California, you could receive an initial fine of $2,500 and a $5,000 fine per subsequent violation.

Fact #4: You Must Never Publish Unethical Remarks

Healthy competition is encouraged on social media, but unethical behavior and remarks are not. If you attempt to defame another business online, you could face a huge lawsuit from the victim. Even anonymous comments about a company can be traced back to your organization. 


If you want to become an industry leader and secure many social media followers, you must do so honestly and fairly.

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