Beware the perils of advertising via social media

Katrina Chambers, Partner, Brisbane
Belinda Pinnow, Solicitor, Brisbane

The Australian Advertising Standards Bureau’s (ASB) recent determination that a business’ Facebook page can operate as an advertisement has far reaching implications for the management of business risk generally. This decision illustrates what marketing has known for some time - social media tools are not necessarily just a method of networking or communicating with consumers.  Such use can legally amount to advertising.

The determination followed an investigation of a complaint made about various comments and photographs uploaded by Smirnoff, and members of the Smirnoff Facebook community, onto a Smirnoff Facebook page.
 
The content was publicly accessible, including to users under the age of 18, and, according to the complaint, featured:

  1. sexist, racist and other forms of discriminatory comment or vilification;
  2. irresponsible drinking and excessive consumption of alcohol;
  3. obscene language;
  4. depiction of under-25 year olds consuming alcohol; and
  5. material that connects alcohol consumption with sexual or social prowess.

While the ASB ruled that the content did not breach relevant advertising codes, in the ASB’s view:

“The Facebook site of an advertiser is a marketing communication tool over which the advertiser has a reasonable degree of control and could be considered to draw the attention of a segment of the public to a product in a manner calculated to promote or oppose directly or indirectly that product.”

The take-home warning is that a business can be responsible for third party generated content posted on its social media pages or accounts.  Categorisation as a “publisher” or “advertiser” opens the door on a wide range of risks, including claims of misleading and deceptive conduct, defamation, breach of privacy and intellectual property infringement. There are also wide ranging ramifications for organisations whose employees access and use social media.

The ASB decision reflects increasing scrutiny of online advertising practices and highlights one of the fastest growing but least understood risks for businesses in the form of social media use generally.

In an earlier decision of Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2), Allergy Pathway Pty Ltd was restrained (and undertook to refrain) from making misleading publications in the form of: 

  1. statements and links to statements posted by the company on its website and Facebook and Twitter pages, and in a video posted on YouTube and embedded on its Facebook and Twitter pages;
  2. testimonials written by clients and posted by the company on its website and Facebook and Twitter pages;
  3. testimonials written by clients and posted onto the Company’s Facebook “wall”; and
  4. the Company’s responses to queries posted by members of the public on its Facebook wall.

In that case, the Federal Court held, amongst other things, that:

  1. the Company knew that persons had published testimonials on its Facebook and Twitter pages; and
  2. it was appropriate to conclude that the Company accepted responsibility for the publications when it knew of the publications and decided not to remove them.

That is, as a result of its knowledge and decision not to remove the testimonials, the company was found to be the publisher of the misleading testimonials.

A further indication of the potential for risk is exemplified by the recent action taken by the Australian Competition and Consumer Commission against Google.  Here the Court considered the search engine optimisation practice of purchasing keywords. The court held that where a Google search used a competitor’s brand name to generate a "sponsored link” advertisement, the publication of the sponsored link on the search results page amounted to a misrepresentation of a connection between the sponsored advertiser and its competitor. This matter is currently the subject of an appeal to the High Court of Australia.
 
What does this all mean for my business?

Businesses that utilise social media platforms should give careful consideration to their current policies and practices, particularly around:

  • terms and conditions of use;
  • monitoring; and
  • moderation of content.


The fact that content was generated or posted by a third party may not be a defence.
  
Businesses need to ensure the accuracy of all statements and representations made on social media sites within their control, and in some cases this may necessitate removal of unlawful content posted by third parties as soon as the individual or organisation is deemed to be aware of the content.

Businesses also need to ensure that they provide training to staff on acceptable terms of use and have clearly defined policies in place.

It is yet to be determined what factors Courts will use to assess when an organisation will be deemed to be aware of content posted on social media sites.


For further information on Gadens' Intellectual Property Practice, please click here or to read about our Employment and Safety Group, please click here.

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This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.