The PJ Tatler

Former Business Owner Jailed, Forced to Turn Over Social Media Passwords

The law continues to catch up with rapid developments in technology. One which presents a particular challenge is social media, where individuals often conflate their personal and professional lives. When relationships turn sour and property disputes arrive, who owns social media content becomes an important question.

A key court case has set a precedent which will no doubt affect future disputes. From the Associated Press:

A Texas man used social media to promote his gun store, posting politically charged messages that criticized the president and promoted Second Amendment rights.

But after losing ownership of his suburban Houston store in bankruptcy, Jeremy Alcede spent nearly seven weeks in jail for refusing a federal judge’s order to share with the new owner the passwords of the business’ Facebook and Twitter accounts, which the judge had declared property…

Alcede’s ultimately failed stand charts new territory in awarding property in bankruptcy proceedings and points to the growing importance of social media accounts as business assets. Legal experts say it also provides a lesson for all business owners who are active on social media.

“If your business is something you feel very passionately about, it can be hard to separate those things,” said Benjamin Stewart, a Dallas-based bankruptcy lawyer. “The moral for people is you have to keep your personal life separate from your business life.”

The whole point of setting up a corporate entity is to distinguish it from the individuals running it, often to establish limited liability and protect personal assets. Business owners are well advised to ensure a clear distinction between business and personal assets. It follows that such distinctions would likewise matter online.