ARTICLE
25 August 2012

Landmark decisions for companies using social media

The Advertising Standards Board (ASB) has cast doubt on the viability of using social media for marketing purposes.
Australia Media, Telecoms, IT, Entertainment

On 6 August 2012, the Advertising Standards Board (ASB) released two determinations which cast doubt on the viability of using social media for marketing purposes1.

For the 1st time, the ASB determined that a company can be responsible under the AANA Advertiser Code of Ethics (the Code) for comments made by the public on the company's Facebook site.

There were 2 key issues considered by the ASB:

  • whether the Code applies to public comments on a company's Facebook site, and
  • if so, whether the particular comments breached the Code.

The ASB determined that the Code did apply to public comments on a company's Facebook site and that a number of the comments on the VB Facebook site breached the Code2.

These determinations pose a concern for companies.

  • Many companies use social media sites for marketing purposes and allow public comment to be posted on those sites.
  • As a result of these determinations, companies should now actively and critically monitor public comment on their social media sites to determine if there are any breaches of the advertising standards codes (and potentially other laws).
  • The staff undertaking this task should be sufficiently aware of the applicable advertising standards.
  • They should quickly pull down any comments that appear to breach the advertising standards.
  • Whether this is commercially practical is yet to be seen.

The determinations appear to be particularly onerous and one might say, not in keeping with the commercial realities of business and social media.

The ASB does not have the same force or powers as the ACCC or ASIC so a more concerning issue is whether the authorities and courts will adopt a similar approach to that adopted by the ASB. The issue could arise in relation to posts by the public (or indeed competitors or lobbyists) on a company's social media pages which are defamatory, misleading or deceptive, or in breach of a court undertaking preventing publication by the company.

At this stage, decisions by the courts in relation to these laws have not been consistent or as onerous as the above ASB determinations. The complaint in the above ASB determinations made reference to a 2011 Federal Court decision (ACCC v Allergy Pathway Pty Limited3). Allergy Pathway was held responsible for breaching a court undertaking not to publish misleading material. The breach concerned material posted on the company's social media pages by 3rd parties. The Court held that Allergy Pathway was responsible given that it knew of the public comment and made a decision not to remove the offending communications. The decision does not extend as far as saying a company will always be liable for public comment on its social media pages. Justice Finkelstein made the following comments:

The effect of these cases (on defamation) is that merely facilitating the commission of a wrong will not result in liability but it is another thing to procure or conspire in the commission of the wrong, in which case liability may be imposed, particularly if the procurer is aware of the material being published and has accepted general responsibility for its publication...A somewhat similar approach has been applied in contempt proceedings.

At the very least, companies need to approach social media use with caution and develop policies for monitoring and use.

Footnotes

1 Case numbers 0271/12 (Fosters Australia, Asia & Pacific - VB) and 0272/12 (Diageo Australia Ltd – Smirnoff)

2 The ASB determined that the Code applied to public comments on the Facebook site. Specifically, it determined that the comments on the VB Facebook site fell within the meaning of 'advertising or marketing communications' under the Code, given that:

  • 'the Facebook site of an advertiser is a marketing communication tool over which the advertiser has a reasonable degree of control', and
  • 'the site 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 ASB determined that the comments breached provisions of the Advertiser Code of Ethics concerning:

  • discrimination, racial and other vilification;
  • sexuality and nudity;
  • strong/obscene language.

3 ACCC v Allergy Pathway Pty Limited {[2011] FCA 74]

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.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More