SEC Says Yes to Social Media for Big Business

Social media has been deemed a legal outlet for cooperate announcements, but only if company investors are informed beforehand. On April 2nd, the Securities and Exchange Commission (SEC) redefined the way that big business can use social media.

The newer, relaxed stance on social media disclosure comes after a dispute with Netflix in December of 2012. In a conflict of interest regarding Facebook posts made by company CEO Reed Hastings, the SEC made claims that the posts violated Regulation Fair Disclosure. Hastings’ post discussed a new Netflix milestone of streaming over 1 billion hours of video in just one month.The SEC guidelines define when and where businesses are allowed to disclose company information, and they are put forth to ensure all investors are made aware of changes at the same time. Hastings later responded to the allegations, and he explained that the information was common knowledge among the investors before the announcement.The recent changes to disclosure regulations have cleared social media as a legitimate outlet for business announcements, and they now focus primarily on fair information for investors. As long as investors are made aware prior to announcements, and they are notified at the same time, social media disclosures are fair game.

These changes mean new advantages to businesses that utilize social media. The new guidelines provide companies with the freedom to better interact with existing customers and the consumer public. Social media is now held in the same light as cooperate websites, and this gives big business a way to truly share their operations with the people.

As social media continues to dominate marketing prowess on the Internet, these new guidelines could not have come at a better time. Connecting at the personal level defined social media marketing in 2012, and these trends are likely to become more common.

Corporate enterprise has realized that direct communication contributes to greater public interest for some time, but the SEC was a little slower to catch up with the big changes put forth by social media.