1. Facebook Marketing Legal and Regulatory ComplianceSocialize Toronto: Monetizing Social MediaJanuary 27, 2012 Presenters: Fazila Nurani, PrivaTech ConsultingDavid M. Adler, Leavens Strand, Glover & Adler, LLC

2. Objectives Understanding the legalframework and regulatoroutlook on Facebook inCanada and the U.S. Key questions fromparticipants. New developments inCanada and the U.S. 3. Context Facebook boastsover 800 millionactive users. About 17 millionCanadian and 150million Americanmonthly activeusers Default privacysettings onlychanged by 15-20% of users. 4. Canadas Privacy Laws Privacy laws apply to personal informationcollected, used and disclosed in the course ofcommercial activities. Mix of federal and provincial laws: Personal Information Protection and Electronic Documents Act, 2001 federally regulated businesses, and provinces without their own private sector privacy law. B.C. Personal Information Protection Act, 2004 Alberta Personal Information Protection Act, 2004 Quebec Act Respecting the Protection of Personal Information in the Private Sector, 1994 Health privacy laws: Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Newfoundland 5. OPCCs Take on Facebook The Office of the Privacy Commissioner of Canada investigatedFacebooks practices in August of 2009. Key findings: Sharing of personal information with third-party developers creatingFacebook applications raises serious privacy risks. Distinction between account deactivation and deletion not clear. Lack of transparency in Facebooks privacy policy. September 2010 OPCC stated the issues raised have beenresolved to her satisfaction, and at the same time announced herinvestigation of the Like button. Stoddart:Facebook is one of several rapidly growing andevolving Internet giants that are presenting ongoingchallenges to privacy regulators around the globe. 6. Social Media Court Cases in CanadaGeneral Trends: Blurring the divide between publicand private life. The more friends/fans you have,the less the expectation of privacy. Stretching the law to fit the socialmedia context. Focus on fairness. Courts are turning to international cases forguidance. 7. Privacy in The United StatesGeneral Observations: US: No Privacy Framework in place FTC: Federal Agency SafeguardingConsumer Privacy Internets Implicit Bargain = FreeContent in exchange for Marketing Online Behavioral Advertising (OBA) Industry Self Regulation / Do NotTrack 8. Social Media CasesConsumer Deception/Privacy Risks Twitter (2010-2011) First FTC Social Media Case Charges: hackers gained unauthorized admin control Result: 20 yr ban on misleading consumers Info Security Program subject to audit for 10 yrs 9. Social Media Cases, Cont.Consumer Deception/Privacy Risks Facebook (2011) Charges: deceived consumers about public availability of private info Result: Bar on misrepresenting privacy and security Affirmative Consent Required for Privacy Overrides 30 Day access limit for deleted accounts Create & maintain comprehensive privacy program Third-party audits every 2 yrs for next 20 yrs 10. Social Media Cases, Cont.Consumer Deception/Privacy Risks Data Breach Notification Laws Federal: Data Accountability and Trust Act (DATA) State: www.ncsl.org provides a comprehensive state-by-state list of data breach notification statutes CA: Consumers can request copy of a Web Sites Data Breach Notification Policy 11. New Developments and Path Forward Ongoing class action lawsuit against Facebook launchedin a Manitoba court claiming the social media site misledusers into letting their personal information be sold for aprofit. December 6, 2011 OPCC released Guidelines foronline behavioural advertising. Coming into force soon Canadas new anti-spam law,the Fighting Internet and Wireless Spam Act (FISA) Opt-in model for commercial electronic messages. New definitions for family and personalrelationships may pose cost implications for socialmedia marketers. 12. Privacy Trends in the U.S. Federal Privacy Legislation Do Not Track bill from Sen. John D Rockefeller (D-W.Va.) privacy bill of rights from Sens. John McCain (R-Ariz.) andJohn Kerry (D-Mass.) FTC Guidelines Online Behavioral Advertising Principals www.ftc.gov/os/2009/02/P085400behavadreport.pdf Industry Initiatives WOMMA http://womma.org/ethics/disclosure/ 13. Summary Privacy Rights Will continue to evolve in the U.S. Will be subject to new federal (and possibly state)regulation Action Items Develop a Social Media Policy Review/Update your Firms Privacy Policy Conduct Due Diligence on digital marketing partnersto understand how consumer information is: 1)gathered, 2) stored, & 3) shared 14. Questions?Fazila Nurani, B.A.Sc.(E.Eng.), LL.B, CIPP/C Senior Counsel and Lead Trainer PrivaTech Consulting Phone: 1-905-886-0751 Fax: 1-905-886-9974_____________David M. Adler | Leavens, Strand, Glover & Adler, LLC 203 North LaSalle Street, Suite 2550 Chicago, Illinois 60601 Direct: (866) 734-2568 Fax: (312) 275-7534www.ecommerceattorney.com@adlerlaw dadler@lsglegal.com