- Facebook’s contracts with some of its ad agencies have a nondisclosure clause that prevents them from discussing any aspect of the company’s business, even if that information is already public.
- Industry insiders say the language is stricter than most client contracts but that it doesn’t apply to most larger and holding company-owned agencies that have more financial leverage.
- This language could be a major conflict for agencies that do work for Facebook but also use Facebook to market their other clients, said Jeffrey Greenbaum of law firm Frankfurt Kurnit Klein & Selz.
- Facebook declined to comment.
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Facebook spends millions managing its reputation and business relationships, and this practice also applies to the ad agencies it uses in its marketing.
Facebook has contracts with some agencies that forbids them from confirming or commenting on any aspect of Facebook without its written permission — even if that information is already public. In some cases, the clause applies after the agency has stopped working for Facebook.
Business Insider reviewed a contract containing this nondisclosure agreement, and while not all agencies’ contracts with Facebook contain this language, multiple small and mid-sized agencies confirmed theirs do. All spoke on condition of anonymity, with some citing concerns about possible retaliation.
This broad language shows how Facebook wields its massive power over the ad industry, especially among smaller agencies. A Facebook spokeswoman declined to comment.
Facebook’s nondisclosure clause poses a dilemma for agencies
All agency-client contracts contain some form of NDA, said Jeffrey Greenbaum, partner at law firm Frankfurt Kurnit Klein & Selz, who specializes in such contracts. They often forbid the agency from using a client’s name and logo without permission and sharing proprietary information about products or services that haven’t been released to the public, but allow agencies