Transfer social media accounts to new owners
When buying or selling a company, transferring valuable social media accounts to new owners is difficult. Yet, social media accounts are now valuable assets. Value and account for these assets when buying or selling a company.
Today, businesses communicate with vast audiences through social media, e.g.
- Coca-Cola: over 72 million Facebook “likes”,
- MTV: over eight million Twitter followers;
- Topshop: over 1.3 million Instagram followers.
However, when buying or selling a business with a significant social media presence, carefully navigate the transfer of social media accounts. Social media platforms’ terms and conditions restrict a seller’s ability to transfer their social media accounts.
When a user creates an account, usually the platform grants the user a licence to use that account according to certain terms and conditions. If the user breaches any term or condition, then the platform can suspend or terminate the account. This often damages a business’ social media presence, since long, inactive periods reduce consumer appeal and interest.
Rights in the Value
Each social media platform is different. Typically, there are two categories of rights:
Intellectual property rights
There are issues around the intellectual property rights in any proprietary content displayed or communicated via the social networking page or profile. Examples include photos, text, brand names, music and videos.
Access and administrative control
There are also issues around the contractual rights to access, control and administer a particular account or page, under a particular username. Many buyers believe the risk of enforcement by the relevant social media platform is low. Often buyer’s competitors ability to report violations is a greater concern.
Transferring social media accounts
Some social media platforms require third parties to obtain their consent, before the platform:
- Discloses a password; or
- Re-assigns a social networking account.
However, buyers find that a platforms’ is consent difficult to obtain. This is partly due to the size of popular social media platforms, and their propensity for automated systems. Hence the likelihood of obtaining consent is low.
Thus buyers require appropriate contractual clauses to manage this issue and avoid a breach of contract terms.
Social media platform transfer restrictions
The terms and conditions of three popular social media platforms include:
- Facebook: a user cannot transfer an account, or any page they administer,
- without Facebook’s written permission;
- Twitter: terms prevent buying or selling usernames,
- which are non-assignable;
- Pinterest: Terms prohibit transfers or assignment,
- Any attempted transfer or assignment that violates the terms of service is null and void.
Our advice includes:
Undertakings to assist in assigning the account
A buyer should obtain undertakings, i.e. promises, that the seller will assist in assigning the social media accounts. Thus the seller is obliged to take positive steps to obtain consent, e.g. contact the social media platform though a help page or contact address.
Unfortunately, social media platforms may not respond to such requests. It the social media account is valuable, then perhaps, as a condition of completion, the seller should obtain consent.
Seller stops using the account
At a minimum, the buyer should obtain the seller’s undertaking to stop using the social media account. In addition, the seller should not object to the buyer creating their own account under the same or similar name.
Clearly, the buyer loses the seller’s existing followers. The buyers starts-over with zero followers. However, at least the buyer stops the seller using the account.
Social media accounts can be an valuable asset. The value should be quantified. This value should be taken into account in all sales, purchases or joint venture agreements.
In practice, it is difficult to transfer legal title in these accounts. Thus the buyer must obtain the sellers agreement that the seller will co-operate and achieve a successful transfer.