Social media legal compliance tips for small businesses

Social media legal compliance tips for small businesses
Enterprise Nation
Enterprise NationEnterprise Nation

Posted: Fri 24th Nov 2017

Social media is a 21st century blessing for small businesses and start-ups to help build their brand. But it does come with its rules and responsibilities. Robyn Murray, trainee solicitor at Enterprise Nation member business Stephenson Law, shares some top tips for advertising your brand on social media in a legally compliant way.

The internet and social media are fantastic tools for building a brand and getting the public interested in what you have to offer.

You can advertise your products and services on various platforms to a myriad of demographics around the globe and, sometimes, it doesn't cost a penny.

Seems like the perfect corporate tool for a small business, right?

The answer is yes, as long as you are legally compliant.

What is the CAP Code?

The Advertising Standards Authority (ASA) is the UK's independent advertising regulator and its CAP Code (the Code) is your bible for understanding what you are doing right, and what you are doing wrong when advertising on social media.

The Code covers non-broadcast advertising and direct and promotional marketing, which means that advertising on social media is captured within its remit.

The Code specifies rules that apply to a large range of scenarios and audiences, for example, adverts directed at children should not include peer pressure and slimming products should not refer to a rate or amount of weight loss.

In terms of social media, the three distinct areas of the Code that apply, are:

  • sharing user generated content (UGC)

  • using affiliate marketing and social influencers

  • running competitions and prize draws

Sharing UGC

The ASA say that UGC is: "content, such as social media posts, tweets, photos, reviews and blogs/vlogs, created by private individuals and published on a website or on social media".

There's clearly a lot of value in promoting products with genuine images shared on social media by real-life customers, either in place of - or in addition to traditional adverts staged with models.

But this presents an array of legal questions for businesses: when can I use an image shared to social media? Do I need to get permission to use a photo? And from whom? For many small businesses and start-ups, this can be unchartered territory and seem daunting.

Sharing photos

A photo which has been shared online isn't necessarily freely available to use. The individual who took the photo is likely to own the copyright over it, and using that photo without their permission could amount to copyright infringement.

In addition, once a photo is shared on social media, the terms and conditions of the relevant platform may impact its copyright protection. You should always check the terms and conditions of the platform that you want to share the UGC on because they will vary.

User reviews and testimonials

Every business loves a good review and they can be extremely helpful in promoting your brand; however, incorporating such reviews into your social media marketing is likely to be considered advertising content, which means YOU are responsible for its compliance with the Code.

When using a review or testimonial always ensure you have:

  • documentary evidence that it is genuine and 100% fact-based

  • verified that they are a genuine customer

  • obtained permission to use their review or testimonial

Affiliate marketing and social influencers

Affiliate marketing and social influencers can take many different forms, including celebrities, brand ambassadors, bloggers and instagrammers.

The Code will apply to social media posts when:

  • there is a payment (including the supply of free items or reciprocal arrangements)

  • you have editorial control over the content (a good benchmark is whether you have final approval of the content, even if it's just to proofread)

Any posts that are subject to the CAP Code must be obviously identifiable as advertising prior to customer engagement.

Prior engagement means BEFORE the customer reads, views, or otherwise interacts with the post in question.

Acceptable identifiers are:

  • AD

  • #AD

  • Advertorial

  • Advert

Unacceptable identifiers are:

  • Sponsored by

  • In collaboration with

  • In association with

  • #SP

  • #Spon or #Sponsored

Competitions and prize draws

Competitions and prize draws are a useful and spontaneous way to interact with customers.

Regardless of the social media platform used, promotions must be run fairly and marketing communications for the promotion must not mislead customers.

Two important rules that apply when running a prize draw or competition are:

  • design the prize draw in such a way that isn't in danger of becoming an illegal lottery

  • comply with the CAP Code

It is important to be aware that when running a competition or prize draw, there is a risk that it could constitute an illegal lottery.

A lottery comprises of three elements:

Chance + prize + consideration

To avoid running an illegal lottery:

  • design it so that success depends on the existence of skill, judgement or knowledge; or

  • make sure your competition entry is free-of-charge

It is important to understand that if winning requires a level of skill, then it will be considered a competition.


Understanding compliance can be daunting, especially for small businesses and start-ups.

This article has hopefully helped you get your head around the basic do's and don'ts. However, it is recommended that you take the time to research the Code and its rules in detail.

Familiarising yourself with recent ASA rulings on breaches of advertising rules will also help develop your understanding of how to advertise your brand on social media compliantly.

Enterprise Nation
Enterprise NationEnterprise Nation
Enterprise Nation has helped thousands of people start and grow their businesses. Led by founder, Emma Jones CBE, Enterprise Nation connects you to the resources and expertise to help you succeed.

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