The selection of Mark Zuckerberg as Time Magazine’s Person
of the Year is a strong signal of
the increasing importance of
social media in today’s society.
As co-founder of the social-net-working site Facebook, 26-year-
old Zuckerberg is the second
youngest person ever to be
chosen as a Time Person of the
Year. As Facebook crossed the
threshold of 500 million users in
2010, and has been proclaimed
the largest human interaction in
the history of mankind, businesses and the legal profession
continue to grapple with issues
that are slowly seeping out of
this phenomenon.
Social media encompasses
any Internet applications that
allow users to create and
exchange content, blending
technology with social interaction. Popular social media
sites include Facebook, Twitter,
LinkedIn and YouTube. These
applications are very accessible
at no cost, such that anyone is
able to have a global audience
with a very low level of technical skill.
With the instantaneous
nature of social media sites,
there is no lag time between
creation and publication, as is
the case with traditional forms
of publishing. These sites can
be used as powerful marketing
and networking tools for business, yet they can also be used
to destroy goodwill or brand
value built up over years by creating electronic records that are
universally accessible to an
instant audience.
In Canada, there are no
specific laws focused on regulating social media sites. For the
foreseeable future, lawyers and
businesses will have to deal
JEFF
LOWE
&SZE-MEI
YEUNG
“In Canada, there
are no specific laws
focused on regulating
social media sites.
with issues that arise in creative
ways, through laws of general
application developed for other
purposes. Nonetheless, businesses need to prepare themselves to react quickly and
effectively to situations that
arise from the ubiquitous nature
of social media.
For example, two employees
of Dominos Pizza used a cellular phone to video food tampering which was then posted on
You Tube. This video was viewed
hundreds of thousands of times
before Dominos was able to
have the video taken down.
Although the two employees
were criminally charged, the
damage was already done.
Unfortunately, clips of the video
can still be viewed online.
Another example is Dave
Carroll, the musician who had
his guitar broken by United
Airlines. As a result of United
denying his compensation
claim, Carroll created a music
video and posted it on You-
Tube. “United Breaks Guitars”
has now been viewed just under
10 million times.
Companies should also
anticipate and plan to deal with
problems. For example, they
can monitor social media sites
from time to time for positive or
negative feedback, and also use
such sites to their advantage to
respond to a problem by creating their own corporate
accounts and posting positive
media clips.
In the case of anonymous
users posting negative comments online, the law of defamation generally applies.
Legal advisors can assist by
contacting, and preparing
cease and desist letters, to
operators of such websites and
chat rooms to immediately
remove such postings. Canadian courts have recently
ordered the disclosure of the
identity of anonymous posters
or authors in certain cases,
particularly in cases involving
defamation, if the host of the
site has this information.
Social media is here to stay.
Businesses need to consider
how to integrate social media
into their workplace, and be
ready to react quickly if they
want to protect their brand and
reputation in cyberspace. By
becoming plugged into the
social media network, many
businesses may discover that
this is a powerful, and yet
largely untapped tool.
Sze-Mei Yeung and Jeff Lowe
are lawyers in the technology
and intellectual property law
practice at Richards Buell
Sutton LLP in Vancouver. Lowe
is also the managing partner of
the firm.
We want to hear from you!
Email us at: tlw@lexisnexis.ca
An oddity in
Business Law
Suit claims shoes
don’t trim flab
as promised
A class action lawsuit against
New Balance footwear maker
claims the company misled consumers with the promise of a
more shapely body through the
use of its toning shoes.
The lawsuit, filed in U.S. District court in Boston, seeks damages of over US$5 million and
alleges New Balance falsely
represented the physical benefits
of its toning shoes. The company
promoted its toning shoes with
claims that the shoes’ unique
sole increases muscle activation
and calorie burn, resulting in a
more toned body, according to
Boston.com.
Unfortunately, it appears that
there’s still no quick fix for flab.
— Natalie Fraser
ISTOCKPHOTO.COM
Franchisee class action lawsuits have recently seen a meteoric rise
Franchise
Continued From Page 9
utes. There is now a sufficient
body of case law to conclude
that the courts will strictly
apply the disclosure requirements of the statutes, the statutes are remedial and should be
given a broad interpretation to
protect franchisees, and franchisors had better treat their
franchisees fairly.
The tentacles of franchise law
developments are spreading
beyond what one would consider traditional franchise situations. Distributors of products
and services who never thought
of themselves as franchisors,
and had no idea they were
required to comply with fran-
“Distributors of products and services who never
thought of themselves as franchisors...are
surprised to find that the very broad definitions in
the statutes could catch their distribution model.
they are dealing with a franchisor
or a franchisee, who are affected
by these legal developments. The
times, they are a-changing.
chise legislation, are surprised
to find that the very broad definitions in the statutes could catch
their distribution model. These
“inadvertent franchisors” are
sometimes shocked to find
themselves defending a claim
from their “franchisees” for noncompliance with a very technical statute.
There has also been a
meteoric rise in franchisee class
action lawsuits. Canadian
courts have spoken clearly and
resoundingly that class action
legislation provides an appro-
priate vehicle to address sys-
temic claims by franchisees,
even based on claims for breach
of the implied covenant of fair
dealing. This area of practice
requires a high degree of exper-
tise and experience to bring or
defend such actions.
Edward (Ned) Levitt is a
senior partner of Aird & Berlis
LLP in Toronto and chair of its
franchise law group. He served
as general counsel to the Can-
adian Franchise Association
from 2000 to 2007 and, as a
member of the Ontario Franchise
Sector Working Team, partici-
pated in the creation of Ontario’s
franchise legislation. Among his
many publications is Canadian
Franchise Legislation, published
by Butterworths/LexisNexis.
We want to hear from you!
Email us at: tlw@lexisnexis.ca
