ASSIGNMENT 1: SOCIAL MEDIA

BESSIE BEARD
PROFESSOR SAMUEL CHRISTIAN
BUSINESS LAW 100
11 August 2014

In attempts to survive E-commerce and rapidly evolving technological advances, businesses are looking to social media marketing to predict and take advantage of increasing consumer buying power on the web. It’s no secret that consumers are actively perusing social media for the best prices, variety, and reviews of products and businesses as they make purchases for everyday needs and specialty items. In many instances, consumers have traded instant gratification from in-store purchases with the satisfaction of cost savings from items bought online. At the vanguard of such a decision to shop online rather than in-store is convenience. The web is the ultimate one stop shop. Big businesses, such as Wal-Mart, Target, Nike, and Best Buy offer all of their products online at reduced pricing and special deals. So, how does a business preserve its market-share and profitability in the web-based marketplace? It looks to social media. Social media outlets assist businesses in not only maintaining their customer base but also increasing the audience that sees and purchases its products. One such social media outlet is Facebook. Not only are companies paying Facebook to advertise their products and services, but they are also creating company Facebook pages to market to consumers and address concerns with products and services. Consumers are able to rate and review the products and services that they have received from a business. Following or friending the business also allows the consumer to tag the business in their posts. This feature provides added exposure and accessibility to the company by way of linking to the company page. This increases the number of people who see and may possibly purchase from the business. It also allows consumers to view the actions taken by the company to resolve customer complaints with products and services. Knowing that a company is willing to refund a bad purchase or provide a gift card for a customer’s trouble increases the likelihood that another consumer will make a purchase of their own. A company’s attempt to rectify any situation bestows added confidence in the company’s customer service abilities. Aside from the benefits of entering into the web-based marketplace, businesses are faced with several challenges. These challenges, if not met head-on by a responsible social media marketing manager, can have adverse effects on a business’s bottom line. It is necessary that the manager be edified in all aspects of social media marketing, especially as they pertain to legal astuteness. In determining legal astuteness, the manager must possess all of the following attributes and behaviors: a set of value-laden attitudes about the importance of law to the firm’s success, a proactive approach to legal issues and regulations, the ability to exercise informed judgment when managing the legal aspects of business, and lastly, context-specific knowledge of the law and appropriate use of legal tools. More important than the behaviors defined is the practice of the behaviors since they proportionally impact the growth and profitability of a business. Value-laden attitudes concerning the importance of law has a special relationship with a firm’s success more than any other component. The attitude that every legal action must add value both quantitative and qualitative ensures that the manager understands each strategy presented will set precedence for the firm’s future operations. Additionally, a proactive approach to legal issues and regulations involved in doing business in cyberspace is not optional. It is obligatory. The web-based marketplace encompasses each end of the world with a variety of different countries, cultures, ethnicities, and races beyond those that are listed on the U.S. Census. The broadness of the scope makes it imperative that managers are conscious of the product types, language, and images that are used on their social media pages and online stores. This component directly ties to the decision-making component of legal astuteness. There is a certain tact required of those that manage the legal aspects of business. Judgments and decisions that are not informed are worse than unethical practices. There is too much information on the web and in books for managers to justify their inability to make informed decisions under the guise of ignorance. Lastly, it is not enough for managers to be aware of the law. The final component of legal astuteness is having context-specific knowledge and knowing the appropriate use of legal tools. “Case by case basis” is a very common phrase used by managers and lawyers alike when a solution is not readily available. However, it should be noted that at the root of every differing case, there is always a precedence that has been set to govern each case. Legal tools such as state and federal regulations, court procedures, and past legal cases are all available to equip management in operating in cyberspace. As legally astute as a manager can hope to be, there will always be situations that arise and have a need for dispute resolution. Because litigation is expensive, can damage public image, and has a lasting impact on customers’ confidence in a business, many are looking to alternative dispute resolution to address legal conflicts. Negotiation, arbitration, and mediation are a few methods of alternative dispute resolutions. With the use of Facebook, businesses are able to provide the consumer with links to their company site for purchases. Since the Facebook page is not used directly for the purchases, advertisement would be the biggest risk factor for the company. It is necessary that the company keep the page up-to-date with its most recent sales and offers while also informing the customer of expirations and end-dates. In the event that the company advertises a product that is not available at its advertised price, negotiation will be the best method of alternative dispute resolution. Usually, the company offers a product or service but specifies that it is not responsible for the information that is on social media as accounts can be hacked, changed, or information can be distorted. Businesses usually try to negotiate with the consumer, accepting partial responsibility for the content of its page. This often comes in the form of a gift card or a free service or product from the company. Again, since the Facebook page is not used directly for purchases by consumers, it is very easy for the federal government to control the transactions that occur across stateliness. Shipping and billing addresses assist the business and government in determining what tax and commerce rules apply to the customer. The focus would be on where the product is going, not necessarily where it came from. Customers should not be subjected to higher taxes and import costs because the company is either international or interstate. Also, the government provides statutes and laws governing the privacy and use of consumer information. Concerning the three branches of government, the legislative branch has the most influential impact on regulating consumer transactions via social media outlets. The legislative branch, which regulates interstate and foreign commerce and controls taxing and spending policies1, would be able to govern the actions of the business that provides links via social media. The primary responsibility of the legislative branch is to lay the foundation of what products and services are allowed to be bought and sold and at what rate these items should be taxed. A decision to allow online purchases and a regulation of the web-based marketplace came from the legislative branch. Though it would take the executive branch to enforce the laws laid out by the legislative branch, the latter still has the ability to set the rules and regulations for E-commerce. First defined, the agency relationship occurs when one person-the agent- acts for or represents another person-the principal2. By this definition alone, no agency relationship exists for Facebook and the businesses that utilize the site for advertising. Just like Facebook does not represent individuals, Facebook cannot become an agent for any business. Particularly, this is so because any company can choose to utilize Facebook. It is not bound by anti-competition agreements, in which it cannot advertise for competitors. Should an agency relationship exist, Facebook would not be allowed to produce advertisements or pages on behalf of competing companies such as Coca-Cola and Pepsi. However, Facebook does produce advertisement for any company that pays and agrees to Facebook’s Advertising Guidelines. In fact, Facebook specifically states that, “Ads may not imply a Facebook endorsement or partnership of any kind.”3 The prevalence of social media outlets provides businesses with a platform for advertising and marketing that can reach around the globe, at any time, with only the push of button. The unique features of social media outlets, such as Facebook, have opened a gateway to billions of consumers looking to connect with their favorite stores and businesses. Social media outlets can be both an oasis of consumers for the best companies or desert for those businesses that are riddled with bad reviews and unresolved complaints. The smart social media marketing manager understands the volatile nature of consumers using social media outlets. Whether the experience is great or less than appeasing, the consumer will share their thoughts via social media. Learning to protect the value of a company’s brand, producing those value-adding strategies, and being knowledgeable of the best methods of handling consumer disputes are all comportments that make a social media marketing manager legally astute.

REFERENCE PAGE
1 2014. Branches of Government. Retrieved from http://www.house.gov/content/learn/branches_of_government/
2Bagley, C. (2013). Managers and the Legal Environment: Strategies for the 21st Century, 7th Edition. Mason, Ohio: CENAGE Learning
32014 June. Facebook Advertising Guidelines. Retrieved from http://www.facebook.com/ad_guidelines.php