McGeveran on Facebook Beacon and Social Media Marketing

By Eric Goldman

Bill McGeveran, a law professor at University of Minnesota, has posted Disclosure, Endorsement, and Identity in Social Marketing to SSRN. The paper walks through Facebook Beacon and marketers’ other efforts to take advantage of online word of mouth through social media. It’s a surprisingly complex endeavor to parse the various harms putatively experienced by consumers and applicable legal regulations protecting against those harms, and McGeveran’s paper navigates through the morass in a sophisticated but easy-to-read way. Facebook Beacon may be over as a cause celebre, but for reasons that McGeveran explains, online word of mouth marketing will undoubtedly play a big role in our future.

The abstract:

“Social marketing” is among the newest advertising trends now emerging on the internet. Using online social networks such as Facebook or MySpace, marketers can send personalized promotional messages featuring an ordinary customer to that customer’s friends. Because they reveal a customer’s browsing and buying patterns, and because they feature implied endorsements, the messages raise significant concerns about disclosure of personal matters, information quality, and individuals’ ability to control the commercial exploitation of their identity. Yet social marketing falls through the cracks between several different legal paradigms that might allow its regulation-spanning from privacy to trademark and unfair competition to consumer protection to the appropriation tort and rights of publicity. This Article examines potential concerns with social marketing and the various legal responses available. It demonstrates that none of the existing legal paradigms, which all evolved in response to particular problems, addresses the unique new challenges posed by social marketing. Even though policymakers ultimately may choose not to regulate social marketing at all, that decision cannot be made intelligently without first contemplating possible problems and solutions. The Article concludes by suggesting a legal response that draws from existing law and requires only small changes. In doing so, it provides an example for adapting existing law to new technology, and it argues that law should play a more active role in establishing best practices for emerging online trends.