Legal Risks of Social Media

Posted: 29/08/2012 in Enterprise 2.0
Tags: , , , , ,
Hello Folks, G’day…

In the previous post, we have known that implementing the social media tool is not only having many benefits for companies, but it also contains many risks. Many companies failed to implement the social media tools because they haven’t thought too much about the risks. Those risks might be internal or external or a combination of both. Yet, this week I would like to continue talking about some of the major legal risks which the companies confront with, how did they do for reducing the risks.

According to Burrows, there are many major legal risks which associated with participation in social media sites.

Risk Category

  • Confidential Information – loss and disclosure
  • Wrongful dismissal
  • Statutory Risks
    • Trade mark infringement – Trade Marks Act 1995 (Cth)
    • Copyright – Copyright Act 1968 (Cth)
    • Privacy – Privacy Act 1988 (Cth)
    • Discrimination – Anti-Discrimination Act 1991 (Cth).
    • Misleading and deceptive conduct – Competition and Consumer Act 2010 (Cth) and Trade Practices Act 1974 (Cth)
    • Defamation – Defamation Act 1995 (Qld) and Common Law
    • Negligent misstatements – Common Law
  • Occupation and organisation specific risks
    • Specific to the industry that the organisation operates in
  • Reputation risk

Those risks include internal or external or both.  Also, those risks might affect companies to touch the law. Consequently, in order to avoid those risks, companies should essentially create Social Media Policy (SMP). The SMP is a great factor that not only able to be protection for the internal part, but it also able to avoid the dispute from the external.

The example of Social Media Policy

Dell Inc. is an American multinational computer technology corporation which develops, sells and supports computers and related products and services. Dell has many employees worldwide, and many users are browsing its information from many social media tools. In order to protect and avoid disputes, Dell Company clearly announces its globe Social Media Policy online that allows employees and customers to exactly understand and agree. Also, Dell Company obviously announces the Social Media Account Ownership to its employees.

There are five social media principles of DELL

  • Protect Information
  • Be Transparent and Disclose
  • Follow the Law, Follow the Code of Conduct
  • Be Responsible
  • Be Nice, Have Fun and Connect

To sum up, making correct decisions is the best method to allow company to avoid the negative affect. In order to create an excellent Enterprise 2.0, companies extremely need to consider the risks and legal risks. Because nobody want to lose money and their business.



Legal risks of social networking for business

Social Media Governance -Policy Database

DELL – Global Social Media Policy


  1. origamijoe says:

    I find it interesting that you mention Dell as an example in this blog post as I know that among the tech savvy as far as ten or so years back, Dell wasn’t held in high standard and only after acquiring Alienware and adopting social media that they have increased the opinion of themselves amongst the tech savvy. Do you think it was due to the social media policies they put in place to be more honest and interactive with these communities or more to do with the business acquisitions?


  2. PrapatW says:

    Social media policies(SMPs) is indeed a great help to control social medias(SMs). It might not be perfect but it’ll help minimize both internal and external risks. People still make mistake even there are laws to control them so we’ll still have to be alert and ready to face any problem that come from SMs.


    Prapat W.

  3. e2student says:

    Great example, didn’t know companies also share their social media policy to customers as well or is that only for a few companies such as Dell?

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