Social Media Ethics: Competitor Relationships Should also be Disclosed

by Shannon Paul on November 23, 2010

The Word of Mouth Marketing Association (WOMMA) and the FTC agree: material relationships should be disclosed when posting comments, tweets, status updates and the like. I understand this may not be news to many. However, I still see many people overlooking disclosure when it comes to posting negative comments or spreading negative news about competitors — especially on Twitter.

So much has been discussed about ethical disclosure in promotion in the last year since the updated FTC guidelines were announced, but we haven’t heard nearly the amount of noise over competitor demotion even though the rule certainly governs each.

The Social Media Group published an overview for companies on compliance with the FTC guidelines:

  • Disclose whenever you have a relationship with an advertiser, brand or company. This has specific implications for employees. You must make a disclosure if you work for Acme Widgets and you mention your employer, competitors, or the widgets industry in a blog post, tweet or elsewhere online.
  • You must also disclose the name of your employer if you are commenting on a forum thread or in a group about Acme Widgets, the widget industry or about a competitor.

This all seems pretty clear to me.

Material Relationships Work Both Ways

If I work for a company and I’m promoting its good news on Twitter, everyone expects me to disclose the fact that company I’m tweeting about is my employer — either in the content of my post, or in my profile information. Makes sense, right?

The reason behind this law is that consumers encountering user generated content need to readily distinguish between bona fide word of mouth buzz from consumers with nothing to gain from sharing positive information about a company or product, and those who are expected to promote the organization out of material self interest.

There’s nothing wrong with sharing positive information about your company. If I work for the company that may change how you feel about the information I share and that is your right as a consumer.

Now, let’s say I run across some negative news about a competitor company and begin posting that news on Twitter. My status as an employee with a direct competitor might also change how you feel about the information I’m spreading online. At least if you knew, you could decide whether or not you should take my participation in distributing this news with a grain of salt, right?

My point is this: You don’t just have a material interest in your employer, but also your competitors. I’m not necessarily proposing additional laws, but negative posts without disclosing a competing interest is just as suspect as astroturfing for your employer or client company.

You Are the Context

Information in social networks has the potential to surface on the Internet out of context. Real-time search, aggregators and Twitter search make it possible for your updates to make traction into other places online you may never visit. Comments on mainstream news sites and blogs also have this potential.

If your material relationships mean you can’t possibly be objective, you should either disclose your relationship, positive or negative, or stick to other subjects.

I get that there can be a lot of gray area associated with disclosure and ethics — how much material is required for a material relationship. What if you used to work for a company, but don’t anymore? However, the law seems to provide a pretty firm foundation for honest engagement — the rest is up to you.

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Comments on this entry are closed.

{ 12 comments }

November 23, 2010 Peter Chee

I completely agree. Ethics in social media is something that people don’t talk a lot about and this post sheds light to the topic. It seems like so many people are jumping into social media and are not educated in proper journalism, proper disclosure, that they just aren’t aware that they could be creating a false buzz around something and misleading others.

I also think that people that post negative comments should definitely disclose who they are and especially if they are working for a competitor. It annoys me to see passive aggressive behavior and not put one’s real name down when responding in a non-constructive feedback manner.

November 26, 2010 Ruth Wagner

Great article on transparency!

This poses a real challenge in short form media (Tweets, Facebook status updates, or Foursquare check-ins). Here at CMP.LY we have been on the forefront of these FTC regulatory issues. We have developed an emerging standard that makes compliance and disclosure straightforward in a simple url disclosure code – less than 20 characters, and all trackable in real time for audit trails.

The guidelines may be complex, but the solutions can be simple. For examples, see a great example of a disclosure that was posted earlier today:

http://cmp.ly/6/uep9w6

and, of course, my disclosure:
http://www.cmp.ly/4/co2loq

November 26, 2010 Raj - SEO Sydney

I think people who message something negative about a company or service should should posses the facts about what they are talking rather expressing their personal wishes on it. And in this case when you have got some real bad experiences, there is no question of disclosing anything other than the facts you have experienced with. Isn’t it?

And yes, to your point that people or companies should definitely disclose the facts before they tweet something negative is really a must. Also, your credibility will be negatively impacted when you cannot clarify what you are talking about.

November 28, 2010 Sommer

I see this all of the time on Twitter and maybe it is b/c it is only 140 characters? I think everyone should have a disclosure link on their Twitter and Facebook profile.

November 28, 2010 Patrick Allmond

“Ethics in Social Media?”

People talk about “social media” like it is this new landscape with no rules that we need to establish laws, rules, ethics and morals for. If you are of this mindset then I believe you take the phrase “Social Media” too seriously. “Social Media” is a new buzzword, but it just refers to something that has been around for a long time. It is called communication and public interaction. And was around well before Mark Zuckerberg or the Twitter guys were even a gleam in their parents eyes.

Don’t try to establish new rules and guidelines (and no they are not needed because the “platform” is new). Review existing guidelines and remind people of common sense when it comes to their company and competitor interactions. If you already know when to disclose relationships (employer and competitor) when dealing with communication (radio, television, print, email, anyplace) then you will know that social media is just another place where it is common sense to disclose your business relationships. If you didn’t know how to ethically handle yourself before “social media” then maybe you should not be using it.

Patrick Allmond

November 29, 2010 Shonali Burke

Great post, Shannon! When I think of it in this context, I too see stuff like this slide by quite often both on Twitter and Facebook.

As I was reading your post, I started thinking… how does one define a competitor, along the lines of your last question, “how much material is required for a material relationship”? For companies, it’s pretty clear; it’s another company that offers similar products/services in the same or a fairly similar space. For some businesses, though – for example, PR agencies – how far does one go to define the “universe of competitors”? What about mainstream media outlets who take other outlets to task on their own pages … and so on.

Btw, I’m not making any judgements here… just asking the question.

I suppose the ideal option is that one would stay away from negative sharing altogether… it just seems like such a nasty thing to do. But we don’t live in an ideal world, do we?

November 29, 2010 Shannon Paul

Shonali –
Agree, negative comments about competitors in social spaces are typically very nasty business; at best it’s a bit of schadenfreude, at worst it’s reverse astro-turfing.

I realize there is a lot of gray area around disclosure, but if it’s PR agency to agency, it’s usually implied all over your profile that you also work in PR. If it’s the case of blasting your client’s competitors without disclosing your client relationship, that’s something altogether different.

For some clarification, I was inspired to write this post after a lot of experience (in multiple roles) where it was evident (to internal folks) that the person writing a comment was a competitor or some other rogue sort of stakeholder… Even though I always advise to address public comments on face value, this really is a nasty business and I wanted to get more awareness going around the fact that this nasty business is technically illegal and wholly unethical.

Any “strategist” who advises a client to post negative comments about their competitors should not to be considered reputable — that’s mostly what I was trying to get at :)

December 3, 2010 Pat McCarthy

Hi Shannon – I think you make some really good points here. You clearly have some great insights into the FTC Guides and how they are being adopted.

At WOMMA we have an annual Living Ethics blog where we collect comments on the ethics of the word of mouth and social media industries. We would love for you to contribute.

The blog is here: http://bit.ly/i30A02

Thanks!
Pat

[Disclosure: I work for WOMMA.]

December 8, 2010 Scott Hepburn

One of the overlooked benefits of the FTC’s new disclosure rules, in my opinion, is that we can now describe certain behaviors not just as unethical, but also as illegal.

I’m thinking specifically of clients and companies who want to manipulate ratings and review sites by posting reviews from fake customers. It happens, we know it, and despite strong warnings and protests, some companies still think it’s a good idea. I actually refuse to work with companies if they choose to do this sort of thing.

With the FTC’s rules, we can point out that this behavior isn’t just wrong — it may be illegal, and can result in stiff punishment. A company that has no problem setting aside their scruples may think twice when there’s a financial penalty on the line.

December 9, 2010 Andrew @ Blogging Guide

I am thinking maybe this people who post negative comments don’t know about this guideline. But, as they say ignorance of the law is not an excuse and since paying someone to post a negative comment against a competitor brand is rampant. This should be strictly implemented. Maybe we need to disseminate this information the best we can so as to be able to educate social media users regarding this matter.

December 17, 2010 Cucipata

Yes, absolutely true, we have seen an overall deterioration of ethical behavior in many areas of our existence, and social media is no exception.

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