2013 was an incredibly active year for social
media legal issues. Below are selected highlights on some of the more
interesting legal issues that impacted social media, along with links to
reference material relating to the topics.
Virtual Currency Guidance and Enforcements - FinCEN published legal
guidance on virtual currency making clear that existing
regulations regarding money transmitter and anti-money laundering laws apply to
certain virtual currency activities. Shortly after issuance of the guidelines,
a wave of enforcements shut down
non-complying entities. [BLOG]
Hearings on Virtual Currency - Congressional hearings were surprisingly
more friendly and receptive of Bitcoin and other virtual currencies.
Privacy - Guidance and Enforcements
COPPA - The FTC issued new
and FAQs for children's
online protection due to evolving technology and changes in the way children
use and access the Internet, mobile devices and social media.
- California passed new privacy laws.
Patents - The number of
social media patent filings continued to increase. The America Invents Act
(AIA) fully kicked in, providing a greater ability to challenge patents
believed to be invalid without going through district court litigation. The Fast
process to get patents issued more rapidly (often in less than a year)
of Social Media Accounts and Followers - Despite a number of cases (including ones
involving LinkedIn and Twitter) relating to
ownership of social media accounts, the law remained murky and fact specific.
This uncertainty can be avoided by proper attention to social media policies
before issues arise.
Employment Law and Social Media
Labor Relations Board (NLRB) - The NLRB continued to issue surprising
guidance and decisions on social media usage. In many cases, some or all
provisions of employers' policies governing the use of social media by
employees were found to be unlawful. [BLOG] The NLRB affirmed that workers have
the right to discuss work conditions freely without fear of retribution,
whether the discussion takes place in the office or on Facebook. But later in
the year it actually found some uses of social media for
employment (firing) decisions to be okay.
Access to Social Media User Names and Passwords - By year end, 36
states had passed or initiated legislation prohibiting employers from
requesting personal social media account information or passwords in connection
with employment decisions.
Conference of State Legislatures Report - Some states have similar legislation to
protect students in public colleges and universities.
forged forward with online gambling.
Nevada - Legalized online
poker and granted its first licenses for interactive gaming.
New Jersey - In February,
passed legislation (signed into law by
Governor Chris Christie) allowing on-line wagering. Subject to certain
limitations, licensed operators are permitted to offer online versions of a
wide variety of games currently permitted in Atlantic City casinos (e.g.,
roulette, craps, black jack, and slots).
Delaware - On October 31,
launched what Delaware officials call a "full suite" of internet gambling.
Zynga - In September,
Zynga withdrew its bid for a gambling license in Nevada
- The prospects for a federal law for online gambling
Mobile Health Applications
- The Food and Drug Administration (FDA) issued guidance that focused on
applications that present a greater risk to patients if they do not work as
intended or that cause smartphones or other mobile platforms to impact the
functionality or performance of traditional medical devices.
- The FTC issued guidance in April focusing
on truthful advertising and privacy.
gaming promotions in a cause-related marketing campaign (where purchase of a
good or service benefits a charitable cause).
Sweepstakes Café Conviction in Florida - Lawyer Kelly Mathis was convicted on 103 of 104 counts
related to illegal gambling based on his role in Internet Sweepstakes Cafés in
Florida. He faces up to 30 years in prison. CA, OH, SC and other states moved
quickly to shut down similar operations.
Equity-based crowd funding legalized in the United States
- In October, the SEC voted unanimously to propose rules under the JOBS Act to
loosen the rules and permit companies to offer and sell securities through
equity crowd funding.
Equity crowd funding is much like crowd funding, which has been popularized in
the United States through sites such as Kickstarter and Indiegogo. The
difference is that instead of individuals supporting campaigns through
donations, numerous investors are purchasing small stakes in startups or small
- Critics of equity crowd funding worry that the industry will be rife with
Ponzi schemes or that having too many investors will hurt startups' prospects
for future funding.
Pillsbury originally discussed this in a January 2012 client alert and March 2012 Blog Post.
Enforcements on Fake Endorsements - In February, the FTC permanently stopped a fake news website operator
that allegedly deceived consumers about acai berry weight loss products. The settlements
will yield more than $1.6 million and conclude a sweep against online affiliate
marketers and networks. The sites falsely claimed endorsements from ABC, Fox
News, CBS, CNN, USA Today and Consumer Reports.
Many companies' understanding of and compliance
with the FTC Endorsement Guidelines remains
lacking, yet enforcements continue.
Glass Liability? - In what may be a foreboding development, a
California woman received a traffic ticket for wearing Google Glass
while driving. Many states have broad distracted-driving laws or bans on
certain monitors that may apply to Google Glass and similar wearable computing
Wearable Computing Lawsuit