Many savvy consumer goods businesses have embraced social media as a low cost way of reaching a young customer base. However, it is important for businesses to remember that the consumer protection provisions of the ACL, including those relating to testimonial representations, also apply to company Facebook and Twitter accounts.

In the recent case of Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74, the ACCC was successful in an action against Allergy Pathway Pty Ltd (formerly known as Advanced Allergy Elimination) and its director, Mr Paul Keir for misleading representations that included videos on YouTube, testimonials written and posted by clients on Allergy Pathway's Facebook "wall" and testimonials written by clients and posted by Allergy Pathway on its website and Facebook and Twitter pages.

Some of the testimonials posted on the Allergy Pathways Facebook wall, and tweeted via Twitter, by members of the public included:

"My asthma and eye symptoms no longer happen after my treatment";

"Allergy Pathway is amazing. It has worked wonders for me in so many ways. I had food allergies for as long as I can remember, avoiding seafood and shellfish and even bread! After one treatment I could eat seafood with no noticeable reaction ... [name], Medical Practitioner"; and

"As a practicing naturopath, I have found this technique to be the most effective method of treating allergic reactions and intolerances".

In finding that Allergy Pathway and Mr Keir made prohibited representations about Allergy Pathways on its website and on Twitter, Facebook and YouTube in breach of its undertakings it had given to the ACCC previously, Justice Finklestein stated:

"It has been shown, indeed it was not disputed, that Allergy Pathway knew that persons had published testimonials on its Twitter and Facebook pages and that it took no steps to have them removed. I infer that one reason Allergy Pathway did not remove the testimonials was that it wanted to take the benefit of the praise for its services. Another possible reason is that Allergy Pathway thought the testimonials added legitimacy to its business.

While it cannot be said that Allergy Pathway was responsible for the initial publication of the testimonials (the original publisher was the third party who posted the testimonials on Allergy Pathway's Twitter and Facebook pages) it is appropriate to conclude that Allergy Pathway accepted responsibility for the publications when it knew of the publications and decided not to remove them. Hence it became the publisher of the testimonials. In any event it is clear that it caused them to continue to be published from the time it became aware of their existence, which is enough to put Allergy Pathway in breach of the second limb of its undertaking".

Mr Keir, the company's sole director, was involved in that conduct and so was also found to have breached his undertaking to the ACCC.

This case serves as a reminder to businesses which market via social media such as Facebook and Twitter, that social media is also regulated by consumer protection laws and that all representations made via a branded Facebook or Twitter page, even those made by members of the general public, come under the scrutiny of the ACCC and can potentially amount to breaches of the law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.