Social Media Ethics: not That Hard, Really

Most of us in the PR industry are familiar with stories of well known companies using online media to deceive consumers and investors. Last year, Wal-Mart and Edelman received lots of attention for the “Wal-Marting Across America” flog (fake blog) which featured a couple traveling around the country in an RV, visiting Wal-Mart parking lots and rubbing elbows with the hoi polloi. Unfortunately, the couple were a professional journalist and photojournalist hired by Wal-Mart and Edelman.

And later in the year, John Mackey, the CEO of Whole Foods, attracted the attention of the SEC and the FTC when it was discovered that he was anonymously posting negative comments in Yahoo Finance forums in an alleged attempt to drive down the valuation of a company Whole Foods was in negotiations to acquire.

Unfortunately, many companies have been slow to learn from these examples, and we’ve already heard several stories of corporate social media deception in 2008.

So why do large, ostensibly responsible corporations persist in trying to “game the system?”

The film The Corporation, analyzes the publicly held company as if it were a psychiatric patient, and renders the diagnosis:

“the institutional embodiment of laissez-faire capitalism fully meets the diagnostic criteria of a ‘psychopath.’”

In other words, our capitalist system encourages deception because the pressures to achieve revenue and growth are institutionalized, while moral behavior is not. So don’t hate the player, hate the game. OK, hate some of the players.

Some in our profession claim to be confused about the rules for using blogs and other social media in marketing and public relations. “This is unfamiliar territory. We’re on the frontier of communications. The rules are being written as we speak.” Nice Try. New media does not require new morality. Most of us know right from wrong, and just because we’re using a blog or an online forum doesn’t release us from our responsibility for ethical behavior.

Nearly everyone can agree that stealing is wrong. (I say nearly, because I will allow that there are those who don’t recognize the right to own property). The Koran, the Bible and the Torah, for example, all have specific injunctions against stealing that are thousands of years old.

Is it reasonable then to conclude that it’s OK to take someone else’s iPhone, as these ancient laws could not possibly have foreseen the introduction of this product?

Of course that’s ludicrous. And it is no less ludicrous to say that social media is so new and mysterious that of course there will be missteps. When you deceive consumers, when you lie to inflate the worth of your company or its products, that’s wrong.

And it’s not like this area is unregulated either. OK, so there are some people who will do immoral things as long as they aren’t illegal. (Think stock option backdating here.) But the Federal Trade Commission regulates unfair business and competitive practices. And the European Union’s Unfair Commercial Practices Directive bars companies from “falsely claiming or creating the impression that the trader is not acting for purposes relating to his trade, business, craft or profession, or falsely representing oneself as a consumer.”

Why wouldn’t these rules apply to social media? Were John Mackey and the Wal-Mart bloggers falsely claiming that they were not acting for purposes of their trade? Yes.

The risks of pursuing these deceptive strategies are great. In Mackey’s case, he invoked the ire of the SEC, not a good thing to do as the CEO of a publicly held company. In the Wal-Mart case, the retailer’s reputation, not very good to begin with, suffered an additional hit. And while so far most penalties have been non-financial, the shroud of mystery surrounding social media is starting to lift, so you can expect 2008 to be the year legislators start going after companies who try to play the “wild wild west” card.

So how do you avoid the ethical pitfalls presented by emerging communications channels? Behave ethically. Hire ethical people. Make ethical decisions. And the next time you’re in a meeting and someone proposes some bonehead marketing or public relations initiative that is deceptive, protect the interests of your client and your company and take an ethical stand.

Joel Postman is the principal of Socialized, a consultancy that helps companies make effective use of social media in corporate communications, marketing, and public relations. His background includes a decade of Fortune 500 corporate communications leadership, four years as the speechwriter to the CEO of Sun Microsystems, and experience in print and broadcast news. He is currently working on a book, titled SocialCorp: Social Media Goes Corporate, to be published in November.

You may also find articles by Joel at the website under Very Public Relations.