Paid advertising is old news. These days it's all
about earned media. That is, news coverage and shares on social
media. Everyone wants to go viral.
But as far as the courts are concerned, advertising is
advertising and misleading conduct laws still apply. Swimwear
designers Seafolly and Leah Madden found this out the long, hard,
It started when Madden posted images and comments on her
personal Facebook page suggesting that competitor label Seafolly
(right) had copied her designs (left). Seafolly retaliated with a
press release saying Madden was wrong, and was acting maliciously.
The fight got ugly and they wound up in court. After an appeal,
they were both on the hook for misleading or deceptive conduct.
The case effectively expands the potential for misleading or
deceptive conduct claims arising from Facebook posts. Here's
The prohibition on misleading or deceptive conduct normally
only applies to companies. This case says that the prohibition can
also apply to individuals acting on the internet.
The prohibition applies to conduct 'in trade or
commerce'. Madden's conduct in posting about Seafolly on
her personal Facebook page (not her business's page) was
'in trade or commerce'. This was because the posts sought
to influence potential Seafolly customers, had a commercial
character and not a private character, and many of her personal
Facebook contacts were also business contacts.
The case confirms the principle that a statement of opinion can
amount to misleading or deceptive conduct, if it's not honestly
held or is recklessly formed.
What's really interesting about this case is the blurring of
lines between private and business social media use. In practical
terms this happens all the time. It's important to understand
that there can be serious legal implications even when you're
blogging in pyjamas.
We do not disclaim anything about this article. We're
quite proud of it really.
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The issue of recording telephone calls was recently considered in the Federal Court in Furnari v Ziegert  FCA 1080.
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