Navigating Social Media Privacy Laws: A Guide for Businesses

Social media is a powerful tool for modern businesses–there are so many platforms available to engage with customers, build brand awareness, and realize growth. However, while companies of all sizes increasingly rely on these platforms, there is intense scrutiny over privacy concerns. 

Ultimately, privacy laws and regulations are ever-changing, and businesses must remain aware of developments to remain compliant, protecting both customer data and the brand’s reputation. 

Understanding these legal frameworks is non-negotiable to avoid penalties and ensure consumer trust. As such, in this article, we will discuss varied approaches and strategies for protecting your company’s digital presence while navigating the complexities associated with social media privacy laws. 

Key Social Media Privacy Laws Every Business Should Know

As businesses interact with audience members on social media, understanding the privacy laws that govern these engagements is essential to confirm compliance and avoid legal issues. 

Here are some of the most critical privacy laws that businesses need to be aware of when handling customer data on social media platforms:

• General Data Protection Regulation (GDPR)
  • Applies to businesses interacting with customers in the European Union (EU).
  • Requires businesses to obtain explicit consent before collecting any personal data. 
  • It gives users the right to access, correct, and delete their data. 
• California Consumer Privacy Act (CCPA)
  • Protects the privacy rights of California residents.
  • Businesses must disclose the personal data they collect and how it’s used and allow consumers to opt out of data sharing. 
  • Offers consumers the right to request the deletion of their personal information. 
• Children’s Online Privacy Protection Act (COPPA)
  • Applies to businesses targeting children under age 13. 
  • Requires parental consent before collecting personal information from children. 
  • Companies must have clear privacy policies regarding children’s data. 
• Other Local Regulations
  • Varied states and regions may have their own privacy laws. For instance, take note of the Colorado Privacy Act, the Utah Consumer Privacy Act, the Texas Data Privacy and Security Act, the Maryland Online Data Privacy Act, the Indiana Consumer Data Protection Act, and many others. 
  • Enterprises of all sizes must remain updated on local and state laws that could impact their approach to social media privacy practices. 

How Social Media Privacy Laws Affect Businesses

Businesses today have an incredible responsibility when protecting their customers’ personal data–especially when engaging in outreach and promotion on social media platforms. 

Consider the following points:

• Personal Data and Why It Matters
  • “Personal data” includes any information related to a person’s identity, such as names, email addresses, IP addresses, and social media profiles. 
  • Under privacy laws, businesses must obtain consent to collect and use this data–and guarantee it is stored securely. 
• What Are the Risks of Non-Compliance?
  • Fines and Penalties: Violating privacy laws can result in hefty fines, particularly related to GDPR or CCPA. 
  • Legal Actions: Companies might face lawsuits from customers or regulatory bodies for mishandling data. 
  • Damage to Brand Reputation: Non-compliance can lead to loss of customer trust and damage the brand’s image. 
• Adjusting Business Practices
  • Businesses must update marketing strategies, confirming transparency and consent when gathering customer data. 
  • Customer interactions must be aligned with privacy laws, including how data is shared or used for targeted ads. 
  • Data collection processes must be streamlined to guarantee that a minimal amount of data is stored–and secured accordingly.

It is key to be proactive and able to pivot as privacy regulations change. This ability is among the best approaches to building and retaining consumer trust. 

Business Structure and Social Media Privacy Compliance

Forming a Limited Liability Company (LLC) offers significant advantages for companies seeking to manage social media privacy risks while simultaneously protecting the business’s assets. 

An LLC creates a legal framework that enables a business to handle privacy-related issues, including contracts, data collection, and user consent. Ultimately, through an LLC, you ensure that it’s the business that is liable for privacy compliance and not the individual members of the LLC. 

Here are some of the key benefits of forming an LLC in relation to social media privacy matters:

• Limited Liability: Personal assets are shielded from business-related privacy issues. For instance, personal retirement accounts, property, and the like cannot be implicated if the business faces a lawsuit. 
• Legal Framework: A structure for handling privacy compliance, contracts, and data protection is provided. 
• Employer Identification Number (EIN): The IRS assigns an EIN, enabling you to manage privacy-related transactions better and ensure regulatory compliance. 

As noted in this article, social media privacy and compliance measures vary by state–and in that regard, LLC formation does, too. So, when investigating how to start an LLC in Texas, know that doing so will also help your company comply with the Texas Data Privacy and Security Act (TDPSA), which was signed in 2023 and is known as the state’s largest and most comprehensive privacy law.  

Practical Steps for Businesses to Comply with Social Media Privacy Law

To confirm compliance with social media privacy laws, businesses must proactively secure customer data and remain within legal boundaries. 

Here are some action items:

• Create a Privacy Policy: Draft clear and transparent privacy policies that outline how customer data is collected, stored, and used, guaranteeing compliance with all relevant laws. 
• Obtain Explicit Consent: Always ask for and record user consent before collecting or processing personal data. This can be done through consent forms or checkboxes during sign-ups. 
• Limit Data Collection: Only collect the personal data necessary for business purposes. Avoid gathering information that is unnecessary to minimize privacy risks. 
• Data Protection: Introduce strong security measures, including encryption and secure storage, to protect customer data in case of a breach. 
• Monitor Third-Party Tools: Regularly review third-party apps or services that are used for marketing to confirm compliance. 
• Provide Opt-Out Mechanisms: Allow users to opt out of data collection or targeted marketing. This offers transparency and user control over personal information. 

The Consequences of Non-Compliance

Failing to comply with social media privacy laws can have severe legal and financial consequences. Businesses may face fines and penalties, such as those related to GDPR and CCPA. In fact, these fines can reach millions of dollars for violations. 

In addition to financial penalties, non-compliance can damage your company’s reputation in the marketplace, eroding customer trust and advocacy, which are vital for realizing long-term success. 

Legal action and lawsuits are also a risk–both filed on behalf of consumers and regulatory bodies. A for instance? Both Facebook and Google have faced multi-million-dollar fines because of privacy violations. This illustrates the serious implications of shrugging off the importance of following privacy laws. 

Stay Protected: Navigate Social Media Privacy Confidently

If you want your business to thrive, you must understand social media privacy laws and confirm compliance day in and day out. 

However, staying on top of changes and new legal developments can be difficult. As such, it’s wise to consult with a digital privacy consultant or an attorney whose job is to remain aware of evolving regulations. 

Take proactive steps so you never feel in doubt and your business is set up for long-term success. 

Author Bio

Amanda E. Clark  is a contributing writer to LLC University. She has appeared as a subject matter expert on panels about content and social media marketing.