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AZ AdLaw l Online Marketing: hashtags and the risk of misleading consumers


AZ AdLaw l Online Marketing: hashtags and the risk of misleading consumers

Hashtags or tags are used on an immense level within social networks. They are used to identify or facilitate the search of key words or topics of interest.  The use of hashtags emerged in the social media platform, Twitter, where users would use hashtags to link their messages to others that utilize the same tag. These tags are created by putting the “#” symbol (called hash) in front of a word or phrase.  If the tag becomes used on a large scale, it will appear in the “trending” section, which gives it important visibility to users of that social network. The hashtag phenomenon has expanded into other social networks, such as Instagram.

Tags or hasthags can be created spontaneously between users of a social network for various purposes such as giving information, reporting facts considered to be unjust, sharing humorous messages or of a political nature. On the other hand, companies have seen the use of hashtags as an opportunity to incite social network users to help make their online advertising campaigns go viral, thus increasing the brand awareness of their products/services.

While this practice can be very useful when advertising brands, events, or online content, it must be done responsibly. From the perspective of Advertising Law, using hashtags that risk confusing the consumer (example: including foreign brands) in the context of an ad campaign, can not only mean a possible infringement on the terms and conditions of Twitter, but could also form a punishable civil or criminal offense. For example, in 2010, there was a company called Taco John in the United States, which was the legal owner of the trademark “Taco Tuesday.”  The company sent a warning letter to a restaurant called the Iguana Grill, advising them to stop using the hashtag #tacotuesday in order to promote their restaurant services on Twitter.  Iguana Grill complied with their competitor’s demand, and had to revert to calling their Tuesday specials as “Iguana Tuesday.”

Another case occurred in 2013, when Fraternity Collection, a well-known clothing store in the United States, took legal action in Mississippi against a clothing designer who used tags like  “#fratcollection” and “#fraternitycollection” in social networks to promote her own designs and that were also sold by the store’s competition. The court, during early stages of the legal proceedings, established that “tagging the name of a competitor or their products in public social network platforms could, in certain circumstances, mislead consumers.”

Therefore, before beginning to use a hashtag on social networks for publicity, it is recommended to first make sure that the use of the hashtag will not incur any error or confusion to the consumer. Otherwise, the risks of trademark infringements, unfair competition, and violation of consumer rights become quite high.

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Álvaro Lezama