Whose Property Is The Corporate Social Media Account?

As we have discussed in previous posts, the issues surrounding ownership rights to an employer’s social media account and its contents continues to be a moving target without definitive answers.  A federal bankruptcy court recently weighed in on this subject, ruling that a debtor company’s social media accounts were property of the estate under the Bankruptcy Code.

The founder and majority owner, Jeremy Alcede, of the debtor company, CTLI, LLC, had created and maintained both a Facebook page and a Twitter account on the company’s behalf. Both accounts bore the name of the company and had direct links to the company’s website. Due to Alcede’s various actions and dealings, the company was forced to commence a Chapter 11 bankruptcy. During the bankruptcy proceeding, the court ordered Alcede to deliver possession and control of the social media accounts, including passwords, to the reorganized debtor company. Alcede objected, contending that the accounts were his personal property.

The court rejected Alcede’s objection, ruling that the social media accounts in fact were the debtor company’s property. The court first determined that there is a distinction between personal social media accounts and business social media accounts, and that only business accounts could constitute the debtor company’s property under the Bankruptcy Code.

Next, the court determined that both the Facebook and Twitter accounts in question were business accounts. In its analysis of the Facebook account, the court focused on the difference between a Facebook “profile”, which is intended for non-commercial uses and represents individual people, and a Facebook “page”, which is intended specifically for businesses and organizations. Although creating a Facebook page first requires someone to create a Facebook profile, the court determined that creating a Facebook page created a presumption that the page belonged to the business. The court also noted that Alcede had granted administrative privileges to the company’s employees to allow others to post updates to the company’s Facebook page via his profile. Because the Facebook page was created on behalf of the company, was linked directly to the company’s website, and was used for business purposes, the court concluded that it was the company’s business account. The court similarly concluded that the Twitter account in question was a business account because it bore the company’s name, included a description of the company in its profile and a link to the company’s website, and was used overwhelmingly for business purposes.

Employers can draw some important lessons from this case. To solidify its claim of ownership of a social media account, an employer should consider taking steps to make clear that the account represents the company, such as naming the account in the company’s name, describing the company’s business in the account’s profile, and directly linking the account with the company’s website and/or its other online accounts. In addition, employers should ensure that their corporate social media accounts are being used solely for business purposes.

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