Category Archives: Law

The FTC May Have Just Killed Twitter Marketing For Dealers

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Yeah, in the most absurd move ever, the FTC has determined that Twitter is not excluded from regulatory laws requiring full disclosure on products or services. The Wall Street Journal reports that any disclosures that would apply to any other advertising also apply to Twitter.

Hmm. Let’s think about that a moment. On a platform that allows only 140 character submissions, how, exactly, do you tell your followers about a great lease special, factory incentive or other promotion AND include the tiny, almost unreadable, 2 paragraph disclosure in 6 point font at the bottom of the ad? Well, you don’t.

So, what does that prohibit by default? Pretty much anything you want to promote that requires a disclosure and, for most car dealers, that’s just about everything. Heck, most factory incentives have disclosures. Contests, giveaways, or any other promotion (social media or otherwise) as well as coupons, service specials, and other customer offerings would also be excluded.

The easiest way to determine whether you can or can’t tweet something about any special, ad car, incentive, lease special, promotion, coupon, service special, parts special etc. is by following one basic rule:

If it needs a disclosure, you can’t tweet about it.

See, that was simple wasn’t it?

Now, all of the above being said, Facebook’s Terms of Service in regards to contests, promotions and such are violated, trampled over and ignored all of the time by both vendors (who know better) and by dealers (who may or may not).

That being said, Facebook can’t investigate your dealership and fine you for non-compliance with advertising regulations either.

So, has the FTC effectively killed Twitter marketing for businesses?

It depends on what you’re tweeting about.

If your tweets are informative, quality content or customer service and engagement focused then no. If your strategy is to blast your inventory and specials to Twitter on some sort of robotic RSS feed that forces everyone to not listen to you anyways, then yes.

You make the call. It’s your business but the U.S. Government has spoken.

Update 3.14.13

I spoke with Compliance expert Jim Radogna about this issue. He researched the actual FTC ruling & found the relevant passages and, in his opinion, you can still tweet specials, etc. as long as there is a clear link to the disclaimers included in the tweet. While the Wall Street Journal article seemed pretty straightforward, it’s in his opinion that they’re incorrect in their translation of the ruling and how it applies to tweets.

Business Insider reports that the FTC released more information outlining a way that businesses can continue to use Twitter to market without actually needing the disclaimer physically present within the tweet. Just use “Ad:” within the tweet

Ford Says Consumer Privacy Is Impractical

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In a Yahoo! exclusive article published today, it was reported that Ford has initiated a lawsuit against 13 individual eBay sellers who they accuse of selling fake or counterfeit Ford parts. I’m not arguing the merits of Ford’s lawsuit as it is certainly within their rights to protect their trademarks and copyrights as well as take steps to protect dealer’s profits in the part business but rather to question the bigger issue encompassed by this: an individual’s right to privacy.

The subpoenas for the  lawsuits were granted by the court for Ford to obtain the seller’s identities and information. What is unusual about this is not that they requested it, but what they asked for after that request was granted.

As reported in the article, most ISPs and websites have policies in place that notify users when the company gives out their information for any reason except for that involving criminal activity and which is requested by law enforcement agencies.

In this case, Ford not only requested the user’s information but also asked for their bank account information (which was denied) then went a step further and asked for the court to prohibit eBay and Paypal (an eBay company) from notifying the targeted users that their information was requested and given out.

This move flies in the face of all privacy issues. With the public outcry against the recent legislation effectively designed to skirt privacy issues accompanied by Ford’s strong pro-consumer brand and social media presence, you’d think they would want to steer clear of any controversy in regards to consumer privacy.

“Much of the debate in recent months over online privacy has been spurred by bills in Congress, such as the Stop Online Piracy Act and a new bill, the Cyber Intelligence Sharing and Protection Act, which passed the U.S. House in April. CISPA would let companies and law enforcement agencies broadly share users’ personal information to fight potential threats — including accusations of copyright violations and counterfeit goods — without penalty, trumping any company policy.” writes Justin Hyde in the Yahoo! article.

The reason reported by Ford for this request was:

“Ford respectfully suggests this procedure is impractical and would serve to undermine the rationale for the subpoenas. The procedure would impose a substantial burden on [eBay and PayPal] to prepare, serve and enforce subpoenas and would serve to “tip-off” or warn the Doe defendants of Ford’s investigation. Under the procedure as written, the Does would have notice that Ford was seeking their identities and thus ample time to destroy evidence, the counterfeit and infringing goods, and flee to avoid service all before Ford would be entitled to receive their true identities.”

I understand why they asked the court to do this but just because it’s a good reason doesn’t mean it should outweigh the right to privacy that all citizens enjoy. This is a civil matter, not a criminal one.

Now that one court has issued what I feel is an invasion of privacy, what’s to stop other judges from following suit. I can think of plenty of GOOD reasons for a judge to do this but that doesn’t mean they SHOULD. Where does an ISP or website draw a “line in the sand”? Despite Facebook’s own internal privacy issues, they have, and are still, fighting other companies from requiring or being allowed to access their user’s information and accounts including employer’s requesting pre-employment access, schools requiring students to reveal their Facebook walls to administrators and more.

Being an eBay user for over 14 years and a Paypal user for about 12, I would hope that they would challenge and fight for their user’s right to privacy. It’ll be interesting to see how this plays out and whether any of the companies involved will take a stand for their users.

While Ford may feel that their lawsuit against 13 people succeeding is more important than our rights to privacy, I just find that.. well.. impractical.

Buy Here ‘Cause They Suck

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Most dealerships and businesses in general know that it’s bad practice to bad-mouth your competition. That being said, I know of and have heard plenty of salespeople and managers using their online reviews to help close a deal by comparing them to their competitors online reviews. This practice is similar if not exactly the same. You are leveraging negative comments about your competitor left by other people (who you are representing as real – we all know fake reviews exist) to your positive reviews (you aren’t really showing people any negative reviews about your dealership, are you?) in an effort to “sell” yourself and your dealership. So, while this isn’t talking bad about your competitor directly, it is indirectly, and what you say can now get you in some deep water.

In a precendent setting ruling, an Alabama car dealership has been awarded $7.5 million dollars due to slanderous comments made during a close to consumers by both the salesperson and sales manager. Apparentley, the dealership’s competitor was owned by an Iranian-born but naturalized U.S. citizen. The sales manager told at least one couple while attempting to close a deal that the competitor was “helping fund insurgents there and is also laundering money for them.” The salesperson was also accused of telling the same couple that the dealer was ”funneling money back to his family and other terrorists…” and that he has a “brother over there and what you’re doing is helping kill my brother.” It is also reported that the competitor was frequently referred to as “Taliban Toyota”.

The jury awarded the Alabama dealer  $2.5 million in compensatory damages and $5 million in punitive damages after deliberating for 3 hours.

While this is certainly an extreme example, it bears watching where the “line” is. This had more to do with a leveraging of race, stereotypes and bigotry but there’s no telling what future lawsuits outcomes would be utilizing this ruling as precedent.

I find it astonishing that, it appears, the sales manager, at least, is still employed at the dealership based on the statement that neither of them were available for comment per a “dealership spokesman”.

I think there are now 7.5 million reasons to add prohibiting the “bad-mouthing of your competitor” to your employee handbook. 

NLRB determines dealership did not break laws in Facebook firing

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In a follow up to my breaking news story about the BMW dealership in Chicago, according to the Chicago Tribune, the National Labor Relations Board has determined that while the employee’s Facebook posts concerning the quality of food and beverages offered to customers at the dealership during a sales event was protected activity, the dealership did not break laws by terminating the employee because he also posted pictures of the accident which took place at a neighboring dealership that belonged to the same company.

The NLRB determination reinforces that you need to be careful when determining disciplinary action when it relates to social media posts by employees as I outlined in a subsequent article. The posts about the sales event, being considered protected activity, means that had the employee not also posted the pictures of the accident (which was not protected activity), the dealership would have lost this decision and been held accountable for fines, back-pay and other disciplinary actions.

(Originally published October 17, 2011 on Dealer magazine)

Facebook Firings Cost Employer $200,000+

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I’ve been following closely, and reporting on, the recent uptick in activity being taken by the National Labor Relations Board in pursuing complaints related to employee terminations due to social media use. All of the previous articles, including thebreaking news story I wrote regarding a BMW dealership who fired an employee due to Facebook posts, were only complaints that the NLRB were pursuing, but no decisions had been made by a judge. All of the similar previous cases had been settled so no precedents existed.

That’s all changed now.

In a press release from the NLRB dated Sept, 7, 2011, it reported that an Administrative Law Judge has ruled in favor of the five plaintiffs who were discharged by their employer over Facebook posts in which they complained about their employer and co-worker stating that the posts were “protected concerted activity.” In the ruling, the judge ordered the company to immediately reinstate all five employees and back pay all five workers – in full – with interest compounded daily, including compensation for all lost benefits.

These employees were “domestic violence advocates.” The average salary for this position is $41,000 according to SimplyHired.com. Using that figure, the employer had to pay just short of $188,000 not including interest and lost benefits, which easily equates to over $200,000.

As I reported, there are many similar cases still pending, including the one involving the BMW dealership.

This ruling is precedent setting and will with no doubt effect the other pending cases as well as any future complaints.

It is now more important than ever that your dealership immediately institute an appropriate social media policy that is specific and that excludes protected activities or review the one you already have to insure compliance with the suggestions made by the NLRB in their earlier issued report.

(Originally published September 14, 2011 on Dealer magazine)