Compliance Crack Down on Social Media Coming?
When it comes to social media, financial marketers are often caught between "content" and "compliance." For instance, how do you promote a financial product or service within the constraints of a 140-character tweet while still adhering to regulatory requirements?
In July, the U.S. Food & Drug Administration cracked down on pharma giant Novartis for using online tools like Facebook Share and the popular social media widget ShareThis. The FDA said Novartis failed to meet regulatory and compliance standards when the company asked consumers to tell their friends and family about Tasigna, a cancer drug.
Facebook Share is a way for people to share articles, web pages and other content with their Facebook friends. With two clicks, someone can send a link along with a thumbnail image and a brief description to potentially hundreds — even thousands — of other Facebook users. Similarly, ShareThis allows people to quickly and easily share web content with users of popular social media services like Twitter and Digg.
Omission of Risk
The FDA is taking a tough stance, calling the drug manufacturer’s marketing incomplete and misleading. The agency, concerned people might tweet something like, "This drug saved my mom’s life with no side effects," fired off a stern letter to Novartis.
"Shared content is misleading because it…fails to communicate any risk information associated with the use of [Tasigna]," the letter stated.
"Widgets that allow users to share content via other social media applications offered via the ‘Share This’ tool…raise similar issues," argued the FDA in its letter.
How will the FDIC and NCUA respond?
The repercussions of the FDA’s crackdown on Novartis could ripple throughout regulated industries, impacting everyone from banks and credit unions to insurance companies and investment firms — maybe even manufacturers of packaged foods. While regulatory agencies often seem to be lagging as much as a decade behind the markets they oversee, they eventually catch up. Even though this is likely the first time the FDA has issued a warning to a pharmaceutical company over its use of Facebook, don’t be surprised when someday soon, you see the FDIC and NCUA launching their ‘Social Media Taskforces’ or ‘Online Compliance Divisions.’
Considering how many financial institutions run video contests and "tweet this" sweepstakes, it’s inevitable that a bank or credit union somewhere will encourage consumers to extol the virtues of a specific product…while somehow failing to meet compliance regulations.
Key Takeaway: Even though social media tools provide limited space for communicating with consumers, financial marketers are responsible for making sure all necessary disclosures are properly integrated into their social media marketing initiatives.
