What Your Business Can’t Do on Social Media: Social Media Marketing Regulations

Over a decade ago, US Airways came under controversy for accidentally tweeting an X-rated image to its hundreds of thousands of followers. Last year, Meta was fined $1.3 billion by the European Union for transferring customer data back to the US. From comical mistakes to administrative disasters, social media missteps can destroy your brand’s reputation and drain your finances. With both the US and EU ramping up their consumer protections, it’s more important than ever for your brand to be aware of social media laws and regulations in order to succeed in the new landscape of social media marketing.

Understanding Social Media Marketing Regulations

Regulations on social media marketing are composed of a variety of legal and ethical guidelines governing advertising on social media platforms and limiting the use of consumer data gathered from those same platforms. These regulations work to ensure that businesses engage in fair competition, uphold consumer rights, and maintain transparency in their marketing practices. By obeying these laws, your brand can build and sustain trust with your audience, avoid legal pitfalls, and your reputation.

Across the globe regulatory bodies enforce these laws, maintaining a level playing field and protecting consumers. The Federal Trade Commission (FTC) is the main organization providing oversight of advertising practices, including endorsements and influencer marketing in the United States. At the forefront of the FTC’s social media advertising guidelines is the mandatory clear disclosure of paid promotions in order to avoid misleading consumers. In Europe, the General Data Protection Regulation (GDPR) focuses on data protection and privacy, requiring businesses to obtain explicit consent before collecting or processing personal data. So far the EU has passed significantly stronger protections for individuals’ personal data, resulting in international discrepancies such as Meta’s $1.3 billion case mentioned above.

Common Social Media Marketing Mistakes to Avoid

With the often casual nature of social media marketing, perhaps the most frequent mistake made is false advertising. Even if it fits into the content, misleading customers with false claims or deceptive presentation is decidedly illegal. If your business is found to have used social media to falsely advertise it can result in significant fines and legal action as well as demolish your credibility. The Federal Trade Commission (FTC) will impose serious penalties for deceptive advertisements, as seen in the recent case involving Intuit. Despite promoting its TurboTax service as “free,” many consumers did not qualify for the free filing option​. While Intuit did not receive any monetary penalty, such controversy can easily push potential customers toward your competition. 

Influencer marketing is a lucrative and rapidly growing subsection of social media marketing, but it comes with strict guidelines. Endorsements are required by the FTC to be as transparent as possible, requiring explicit disclosures such as #ad or #sponsored. Any failure to disclose a partnership as paid will likely lead to fines as well as a loss of public trust. The FTC has updated its list of social media advertising laws in recent years to reflect modern trends, emphasizing the necessity of clear and conspicuous disclosures and attempting to address issues like fake reviews and incentivized endorsements​​. If your business wants to make use of the powerful tool of influencer marketing, it’s vital that you ensure your paid endorsements are explicitly marked as such and don’t contain any misleading claims.

Analyzing the data on your brand’s social media marketing efforts can reveal unparalleled market insights, but it’s important to remember that collecting and utilizing any user data without proper user consent is a massive violation of privacy laws. Regulations in Europe like the GDPR and the California Consumer Privacy Act (CCPA) in the United States mandate that businesses obtain explicit consent from users before collecting their data. Other US states don’t have such explicit protections in place for user data, but regulations like these are leading the way in establishing best practice. Any non-compliance with these regulations could result in hefty fines and other legal repercussions. For instance, the GDPR is able to impose fines of up to 4% of a company’s global annual revenue or €20 million, whichever is higher. Establishing consent with users before collecting their data can raise their trust in your brand while keeping you out of legal trouble. 

Social media marketing has resulted in slightly less moderation of utilized media, but as always, using any third-party content without receiving permission is copyright infringement and prosecutable. Even if it’s just for something casual, it’s vital for your brand to ensure you have the right to use images, videos, and any other media in your social media posts. The easiest way around this is to simply create your own original material, but it’s often possible to obtain a license for third-party content. Consider subscribing to stock media services if you find your brand running out of licensed material. 

Industry-Specific Regulations

If you’re a brand in the healthcare sector, your social media activities must adhere to the Health Insurance Portability and Accountability Act (HIPAA). HIPAA prohibits the disclosure of any identifiable patient data without explicit patient consent to preserve patient privacy and secure health information. Even in seemingly harmless social posts about daily operations or patient interactions, h​ealthcare providers must avoid inadvertently revealing patient information or else face serious repercussions. 

Financial institutions are subject to the authority of the Financial Industry Regulatory Authority (FINRA), which establishes stringent regulations that prevent misleading financial advice and ensure clear, honest communication with the public. This includes a requirement that any promotional content, including social media posts, be fair and balanced. In early 2024, FINRA fined M1 Finance $850,000 for exaggerated or misleading claims about their services made by social media influencers. Situations like that are why it’s essential that your brand clearly communicates industry regulations to anyone you partner with to advertise on social media.

Due to their illegal status for underage consumers, advertising regulations for both tobacco and alcohol are particularly strict. Any social media advertising for these industries must ensure that their ads comply with both federal and state guidelines for general advertising, which restrict where and how these products can be promoted. Generally, social media advertising for alcohol and tobacco can only occur in spaces with clear age verification measures in place to prevent the promotional content being accessed by underage individuals, and it cannot be framed in a way that would appeal to minors. 

While some US states have legalized cannabis products in the United States, it is still federally regulated which has resulted in a patchwork of rules. Due to this, the CBD and cannabis industries have to target their advertising to specific regions. Facebook, Google, and other major platforms have their own restrictions on cannabis-related advertising, frequently prohibiting it in any form. Due to this, it’s important that your brand researches the regulations of any social platform you plan to advertise on. If the platform does allow cannabis advertisements, you still must ensure that your ads do not make any unverified health claims and are only targeted to regions where cannabis is legal​.

Strategies for Staying Compliant

The first step in your brand’s efforts to advertise on social media should always be a comprehensive social media marketing policy. In this, clearly outline your brand’s guidelines for content creation, endorsement disclosures, and users’ data privacy. By establishing these rules before you begin posting, your brand can ensure that all your social media activities are both legal and ethical instead of having to fix earlier mistakes. It’s essential to regularly update policies, reflecting changes in regulations and new trends on social media. By crafting a comprehensive social media policy now, your employees can have a reference point for all future actions, ensuring consistent and lawful practices across all your brand’s social media channels​.

It’s also important that you give your social team the training they need to be in line with advertising regulations. This should cover the basics of compliance, recent changes in laws, and any industry regulations relevant to your brand. Employee training may also include case studies of ramifications faced by companies for non-compliance, emphasizing the potential consequences. This is also why it’s so necessary to understand that your social media team does more than just posting and commenting, and to treat them as the integral part of your marketing team that they are.

Your brand should constantly be self-monitoring your social media presence to catch any mistakes before they become a problem. For example, tools like Hootsuite or Sprout Social can be used to track and analyze social media activities, ensuring they meet regulatory standards. A more reliable option is to partner with a social media agency that specializes in regulatory compliance. These agencies are able to conduct thorough audits, offer compliance training, and provide updates on new regulations, ensuring your business remains compliant and up-to-date with its social media marketing.

While advertising on social media can offer your brand fantastic reach and connect you directly to customers, there are a few vital things to remember. Ensure that you have the rights to use any content you post, that any sponsorships are clearly disclosed as such, that your advertising is truthful, and that you follow relevant regulations in regards to user data. One of the biggest things you can do right now to protect your business is to take another look at your brand’s social media policy and ensure that everything is compliant. 

Want to take your brand’s social media presence to the next level, all while staying in line with ever changing industry regulations? Reach out to Joybyte today to see how you could benefit from a dedicated social marketing team, or read more about our industry strategies for social media marketing and other modern advertising tactics on our blog.