Threads Poses Legal Challenges for Brands and Corporate Counsel

Meta’s Threads is the hottest new social media platform, quickly exceeding 100 million users—faster than any other app in history—since its debut July 5. There is no advertising on Threads yet, but it’s intended to compete with Twitter. One of Threads’ goals is to provide advertisers with a safer and less toxic environment. Nevertheless, there are important limitations to consider when using the platform for advertising and promotional matters that advertisers and brands should keep in mind, particularly once advertising is accepted.

Will Moderation Entice Advertisers and Brands?

Brands are very conscious of the environment where they’re promoted. Twitter’s significant downgrading of its content moderation activities drove a number of brands to suspend their marketing activities on the platform out of fear of being associated with distasteful, if not outright, hate speech. Meta has invested significantly in content moderation and states that it rejects hate speech and sexually explicit posts, among other things, providing advertisers with more comfort concerning the social media environment.

By combining the interactivity of Twitter with an algorithm that moderates unfavorable speech, Threads has the potential to succeed as a platform for brands to promote themselves and offer a wide array of activations.

Brands must keep in mind that moderation protections may be limited. Meta intends that Threads content can be accessed by open social media platforms. Those platforms may not have the same moderation standards as Meta, which could result in brand owners’ content being displayed in an unintended environment.

Threads’ Current Platform Limitations

Before launching a campaign on Threads, brands need to consider its parameters. In particular, like Twitter, there is a limitation for posts— currently set at 500 characters. This is relevant because social media engagements frequently trigger mandatory disclosures, such as the FTC’s requirement to disclose a material connection between the brand and, for example, an influencer.

Brands need to make sure that influencers include the disclosure—such as “sponsored” or “XYZ Brand Ambassador”—in their posts, notwithstanding the character limits. This is particularly true for sweepstakes campaigns, which also trigger FTC disclosures. And the disclosures must be prominent in a post and not buried in a long string of hashtags.

Advertisers also need to consider whether any claims that are being made in their own content require clarifying disclaimers. If so, they must be worked into the post within the character limitation yet be sufficiently prominent and descriptive to provide the appropriate context of a claim.

Notwithstanding the ease of reposting a user’s Thread, brands must be careful before doing so. A brand is generally not responsible for a user’s post about a brand or its products or services when there is no connection between them. However, when a brand publicly engages with a user by liking, sharing, or reposting a social media engagement, regulators and plaintiff’s attorneys have taken the position that such recognition or adoption of the post translates into a claim that is being made by the brand.

Threads doesn’t allow for direct messaging, so any engagement with a user will likely be public on the platform. As such, a brand might be found to have made an unsupportable performance claim or a claim that is inconsistent with its regulatory pathway, potentially requiring FDA or other regulatory approvals. Accordingly, brands must take great care before positively engaging with users posting about it.

Outlook

Threads’ burst of popularity is being driven by the popularity of Meta’s other platforms, including Instagram, as well as Twitter’s recent unpopular editorial changes. While brands are anxious to jump on Threads’ exploding popularity, they should still consider the platform’s limitations and potential exposure, particularly once advertising is accepted.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Andrew Lustigman is a partner at Olshan Frome Wolosky in New York.

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