Yesterday, Stephen participated in a social media and the law hangout with radio personality, Jules Lund. In front of a live audience at Mumbrella House, they both discussed social media issues, particularly brands or companies using social influencers and how the law is catching up.
You can read Stephen’s article about social influencers here or you can watch a video of the hangout below!
Responding to complaints about ads is part and parcel of the job for creative agencies and brands. The fact is, some of the best advertising pushes the boundaries of what is socially acceptable. Creating ads that challenge, confront or shock audiences has proven to be an effective way for many companies to get their message across.
And, of course, some ads are just plain offensive or inappropriate.
But what happens when somebody complains? In 2014, the Advertising Standards Board received a record number of consumer complaints – approximately 5,600 – about advertising. The usual suspects – boobs, swearing and erectile dysfunction – were all in there, along with a number of ads that received complaints because of their high ‘ick’ factor including scenes such as nose picking and farting. First place in the list of most complained about ads in 2014 was for an ad encouraging married people to have an affair, although the Board found the advertiser hadn’t cheated and the complaints were dismissed.
While consumer complaints can be a headache for agencies and brands, they are an important part of advertising self-regulation in Australia. Agencies therefore need to be aware of their obligations and should know how to respond to complaints when they arise.
The Advertising Standards Board (ASB), part of the Advertising Standards Bureau, is the body responsible for handling consumer complaints about advertising in Australia. The Board is made up of 20 people, chosen to be reflective of Australian society and makes its determinations under the various industry codes prescribed by the Australian Association of National Advertisers (AANA), such as the AANA Code of Ethics, the AANA Code for Marketing & Advertising Communications to Children and the AANA Food & Beverages Advertising & Marketing Communications Code.
As a rule of thumb, about 85% of consumer complaints to the Advertising Standards Board tend to be dismissed. The top 10 most complained about ads in 2014 were all found to be compliant. But that doesn’t mean that brands and their agencies shouldn’t take their responses seriously. The consequences for having a complaint upheld can include a direction to modify or remove the ad, which can undermine campaigns and may involve significant costs to the agency and client.
The AANA Code of Ethics
The object of the AANA Code of Ethics is to ensure that advertising and other forms of marketing communications are legal, decent, honest and truthful. The Code is divided into three parts:
- Competitor Complaints;
- Consumer Complaints; and
- Other Codes.
When the ASB considers consumer complaints, it assesses the impugned advertisement against the requirements of Section 2 of the Code, which sets out rules about discrimination and vilification; the use of sex appeal in a way that is exploitative or degrading; violence; sex, sexuality and nudity; strong and obscene language; and health and safety.
The ASB does not consider complaints that fall outside the scope of the Code, which is why ads with a high ‘ick-factor’ or ads in ‘poor taste’ but that otherwise comply will not be found to be in breach.
A ‘prevailing community standards’ test also applies to all parts of Section 2, which effectively means that the ASB will have regard to what it considers to be prevailing community standards at the time the advertising/marketing material was published. Accordingly, this is a shifting gauge – something that might not have been in accordance with community standards in the past (such as an advertisement of a woman in a bikini) might be perfectly acceptable today.
What to do if you receive an advertising complaint?
In many cases an advertiser is not likely to know that someone has complained about their ad until they receive a letter from the Case Managers at the Advertising Standards Bureau.
This letter will provide a copy of the complaint(s) and identify what section of the Code is likely to apply. For example, if the complaint is about violence, the letter will identify that the most likely section of the Code to apply will be Section 2.3. It will also provide a list of information the ASB requires the advertiser to provide along with its response, such as the CAD reference number (if applicable) for the advertisement, a copy of the script etc.
Firstly, the most important thing is not to ignore the letter. Deadlines are tight and responses are usually required within seven days. In our experience, it is helpful to consider the following points when responding:
- What is the background? Where did the advertisement run and who was likely to see it? This can be particularly important if complaints relate to children.
- What is the nature of the product? Do any specific codes or regulations apply? This can be relevant, for example, for food or beverage product or an alcohol product.
- Does the advertisement have a CAD rating and, if so, was it screened during appropriate timeslots? This can help to establish whether the advertisement was appropriate to the relevant audience.
- Did you seek any legal or other advice about the advertisement? If so, what did it say?
- Did the advertiser receive any other complaints? While one complaint is enough to have an ad removed, if the ad is otherwise well received it may indicate that the complaint is not reasonable having regard to prevailing community standards.
- What does the relevant section of the Code say? The response should address each part of the relevant section of the Code to outline why the advertisement is not in breach. If the advertisement may also breach another section of the code that not listed in the ASB’s letter to the advertiser), this should also be considered and addressed.
- Reviewing previous ASB determinations.
- What is the tone of your response? Some advertisers tend to adopt an aggressive approach – one advertiser recently labelled complainants “oxygen thieves” – but in our experience this usually isn’t the best method.
There is no need for response to be lengthy, as long as it addresses all of the points raised in the ASB’s letter to the advertiser and explains the advertiser’s position.
And, of course, if you are in doubt, seek professional assistance. We have significant experience responding to ASB complaints on behalf of advertisers and agencies and are able to provide advice and draft responses at short notice.
It is evident from a casual gaze through social pages or comms industry commentary that brands are turning to ‘social influencers’ to promote their products through online social channels, with the intent of influencing consumer purchasing decisions in favour of their products.
Brands and their agencies are identifying and building commercial relationships with individuals, events or groups such as journalists, bloggers, instagrammers, consultants, or industry analysts (directly or via influencer networks) to leverage them and build brand credibility within their identified following or ‘tribe’. This has sometimes been referred to as the Oprah Winfrey effect.
The product is sometimes overtly or subtly promoted by the influencer and the influencer does not always disclose that they have been rewarded. This gives rise to an important consumer law question – do social influencers need to disclose rewards and commercial connections with brands and products?
The question is important because consumers trust what is said online and a breach of that trust may result in a breach of the law. According to Nielsen Global Online Consumer Survey more than two thirds of consumers say they trust opinions stated online – second in trustworthiness only to recommendations from people they know in real life.
For example, in January 2015 Australia Post came under fire after being caught out by consumers over its use of social media influencers, when it emerged it was paying instagrammers without disclosing that their endorsements were being paid for.
Social influencers take many different forms, including:
- Celebrities and personalities with a significant social presence and ‘tribe’ of followers
- Brand ambassadors
- Events / activities / sports (eg V8 Supercars)
- Bloggers and instagrammers
- Journalists (native advertising)
- Individuals that have received social notoriety purely from their social activities (eg You Tube videos)
- Product review sites – (eg App Store etc)
The Australian Competition & Consumer Commission (ACCC) is the Federal Government regulator looking after the interests of consumers and competition in the Australian market place. They administer the Competition & Consumer Act 2010 and this act contains the Australian Consumer Law (ACL) which applies to the commercial practices of any person, company or business in Australia.
The ACL prohibits misleading or deceptive conduct and specific product misrepresentations, including testimonials (Section 18 and 29). This is the only generally applicable law at this time that would require social influencers to disclose rewards and commercial connections for posts. A brand or business would only need to do so if, in the circumstances, it would be misleading or deceptive or a misrepresentation NOT to disclose rewards and commercial connections for posts.
What this means legally is difficult to answer and must be assessed on a case by case basis having regard to the nature of the communication, the context, the likely audience of the post and the consumer ‘take out’.
The uncertainty in Australia is compounded due to a lack of judicial decision – we are still waiting for the “big” court decision around the requirements of social influencers and their paid for posts, although we can obtain some guidance from a case involving celebrity testimonials: ACCC v Advanced Medical Institute Pty Ltd (the Turpie Case), in relation to advertising and promotion by Advanced Medical Institute Pty Ltd (AMI) of a nasal spray form of treatment for erectile dysfunction. The Federal Court of Australia declared that AMI engaged in conduct that was misleading or deceptive in breach of section 52 of the Trade Practices Act 1974 (now section 18 of the ACL) by causing advertisements to be published in major newspapers featuring the celebrity Ian Turpie and containing false representations including:
- That Mr Turpie had undertaken an interview during which he disclosed, in the presence of his wife, that he was losing his sexual potency, and
- That AMI nasal delivery system had cured or alleviated Mr Turpie of the effects of impotence or erectile dysfunction.
The court also declared that the advertising agent for AMI, by preparing and causing the advertisements to be published, was knowingly concerned in, or party to, the breach of section 52 of the Act. This makes it clear that both the advertising agency and the celebrity concerned can be held liable for misleading conduct.
Another recent case of some relevance to the question of liability is ACCC v Allergy Pathway Pty Ltd, where the Federal Court found the defendant company liable for false customer testimonials posted on the wall of its Facebook and Twitter pages, when it knew the testimonials were false and took no steps to remove them.
An example involving Twitter occurred in April 2012, with the SA Tourism Commission Kangaroo Island ‘Cash for Tweets’ controversy when they came under fire from Media Watch for paying celebrities to tweet positive messages about Kangaroo Island without disclosing that the celebrities were paid to post.
The ACCC is presently watching social influencers and has issued some guidance for online reviews. From our reviews of the ACCC’s commentary, press releases and comments to journalists we can state with confidence that the ACCC is of the view that the use of endorsements on social media can breach the ACL when the influencer has received payments for the post or comment that is not disclosed. For instance:
“There is nothing illegal about paying someone to do an endorsement, but is a third party aware of the commercial relationship? What we ultimately say to businesses and bloggers is that you are on good safe ground if you disclose commercial relationships. When you’re not then you start running into this grey area that could potentially lead you to a messy end.” Michael Schaper, ACCC Deputy Chair, January 2014.
Here are some compliance tips we recommend for brands and agencies entering into commercial relationships with social influencers and offering rewards for posts:
- Enter into an appropriate Social Influencer Agreement with the influencer that addresses the legal issues (including those discussed in this article) and mitigates brand risk appropriately
- The risk of ACL breach in our view increases if the comment or post is actually ‘scripted’ and clear disclosures about the rewards and commercial associations are not made
- Posts and testimonials must reflect genuine views, opinions, experiences and should organically fit
- For celebrity or other influencer to disclose rewards, incentives and commercial connections with a brand – case by case basis as to whether they need to disclose. Consider audience take out and if a well known brand ambassador already
- If consumers think blogger is blogging without commercial influence, likely to be misleading or deceptive
- Blogger should disclose commercial connection in a prominent way
- Blogger should be told incentive is available regardless of what is stated – positive or negative
- Paid for and fake positive consumer reviews on review sites likely to be misleading or deceptive
- Brands writing of ‘own’ reviews to look like genuine consumers – eg fake testimonials on You Tube, own websites, Facebook page etc likely to be misleading or deceptive
- Brands writing negative reviews to damage reputation of competitors likely to be misleading or deceptive
The use of social influencers by brands and their agencies is growing in popularity but it is important that their influence is used in such a way so as to enhance the brand and its products and not result in negative commentary and legal liability. As the legal implications of using a given influencer and releasing a particular post must usually be considered on a case by case basis, we strongly recommend that legal advice and clearance be obtained.
Firm principal Stephen von Muenster recently attended Mumbrella’s CommsCon on 20 March 2014. He presented a question and answer session on ‘Managing Risk: How to keep your brand on the right side of the law.’
During this session, Stephen was asked questions relating to a number of legal areas. Below are some key take outs from the session.
I run a small PR agency. When I help a client get great publicity in the newspapers, I sometimes scan in the clippings and put them on our website, and also send them a copy. I’ve heard I could get into trouble for this. What should I do?
• Copyright protection automatic and applies to editorial works if there is a reproduction of a substantial or important part of an original work
• No copyright in linking to the article; no copyright in simply the headline of the article
• For reproduction in full, including on the Internet, get a licence from Copyright Agency Limited (CAL) for the use as this is a collecting society that manages a number of publishers’ interests
We look after a client’s Facebook page. Sometimes the public say some pretty offensive things in the comment thread about the brand, or other people. If it’s libellous are we liable?
• Under Defamation Acts (2006) defamation can occur where one person publishes content [words, sound, video, images] that damages reputation of another identifiable person
• Liability for defamatory publication can extend to a brand where the brand is able to exercise control over a publication, there is knowledge of the publication and there is a failure to prevent or remove the publication by a third party, eg on a brands blog or Facebook page etc
• Have clearly stated community guidelines and netiquette outlawing personal attacks, vilification and defamation. Such comments would also be a breach of Facebook’s Rights & Responsibilities
• Actively moderate or review blog postings / comments and remove those that breach community guidelines or rules of social media site – do not rely on users to tell you
• Remember the case of Federal Court decision in Seafolly Pty Ltd v Madden highlights social media legal media risks in the areas discussed above, including:
o Misleading & deceptive conduct
o Injurious falsehood
o Copyright infringement
I help run the social media community for several of our clients. Are there any implications of the changes to the privacy laws in how I share any information we gather?
• You need a compliant collection statement at the point you collect personal information
• All direct marketing via ANY channel (including banners and social) that uses personal information needs to comply with APP 7 (direct marketing)
• Direct marketing can be via any channel including:
o Email – eg using personal information provided by customer in the course of signing up for a loyalty program
o Online advertising – including targeted advertising when browsing
o Social advertising – eg facbook user ID’s, displaying an ad on social media to an individual using personal information (including data collected by cookies dropped as a result of the individuals site visits)
I’m about to change agencies. I’ve got a great relationship with a couple of clients, and I think I can persuade them to come across. I also happen to know that the contract is up soon. Are there any risks in getting involved in bringing them in?
• Comes down to your contract
• Usually we see non-competes and non-solicits
• Non compete means you cannot work for a competitive business but these are difficult to enforce against employees who need to earn a living in their chosen profession – unreasonable restraining
• More enforceable if can be proven are the non-solicits of clients of the former agency or employees of the former agency
• Also need to consider confidential information and IP issues that arise in employment contracts
I’m tired of training up staff, then just as they are becoming useful they get poached for more money and move to a rival. Is there anything I can do to stop them from working somewhere else?
• Pay them more money
• Bonus incentives tied to loyalty and staged payments
• Enforce non-solicits if applicable
I’ve had a great business idea. But I did some of the work on it during my lunchbreaks. If I go out on my own can my employer claim they own the idea?
• Need to check your employment contract to see if there is anything said as to what is “during the course of employment”. It may cover lunchbreaks particularly if you are using company assets eg computers, resources etc to develop your idea.
• Need to consider if the ‘idea’ is IP – if it is something protected by copyright and it is in the course of employment then agency will own the IP
• If it is an idea only it may be protected by employment contract and the common law obligations of confidence that an employee has to his or her employee
• Best to come up with your ideas at home out of work duty hours and only tell your employer of your idea if you agree with them up front that you own it at this stage
A relationship with a client ended badly. They haven’t paid their bills for the last three months, claiming they got no results. They had unrealistic expectations. They owe us about $20k. Should I sue?
• Depends on the circumstances of course. There may be legitimate dispute here.
• If they never raised any concerns prior and now conveniently, after the relationship ends and you have issued final bills, they say they did not get what they paid for, they may find it hard to defend.
• Statutory demand is a possibility
• Always get legal advice
We are always happy to answer your questions. Please contact us on (02) 8221 0933 or via email@example.com if you have any further queries.
It’s Saturday night and you’re looking to try a new local restaurant, but which one? Smartphone in hand, you jump onto Yelp to assess the nearby options. You follow your app’s suggestion and try that new Japanese place with rave reviews.
A few weeks later you’re dreaming of a weekend escape, but where to stay? A quick visit to TripAdvisor and you know the top 10 accommodation options at your destination. You know which hotel has the plushest pillows and which serves the crispiest bacon at the breakfast buffet. You make your decision accordingly (you choose the bacon, obviously).
Online consumer reviews have changed the way in which consumers make purchasing decisions. We increasingly rely on these review platforms to inform our buying habits. A recent Sensis Social Media Report 2013 suggests that 74% of social media users read online reviews before making a purchase. For this reason, the ACCC has placed a focus on maintaining the integrity of reviews and review platforms. In December, the ACCC released a set of best practice guidelines entitled ‘What You Need to Know About: Online Reviews – a guide for business and review platforms’.
The guidelines set out three guiding principles:
- Be transparent about commercial relationships
- Do not post or publish misleading reviews
- The omission or editing of reviews may be misleading
The publication also provides more specific guidance for businesses and review platforms to follow, so that they can avoid engaging in misleading and deceptive conduct.
Review Platforms should:
- disclose any commercial relationships between the review platform and reviewed businesses;
- remove reviews known to be fake;
- disclose any incentive which the platform offers in exchange for a review;
- remove offensive, defamatory or irrelevant reviews;
- refrain from selectively removing or editing negative reviews because of a commercial relationship with a reviewed business; and
- provide reviewed businesses with an opportunity to post a public response to negative reviews.
Reviewed Businesses should:
- refrain from soliciting others to write reviews about their business or a competitor’s business if they have not experienced the goods or services;
- refrain from using platforms as a forum for personal reprisals against staff or business owners; and
- follow the guidelines and exercise caution when offering incentives in exchange for reviews.
Under the Competition and Consumer Act 2010 (Cth), organisations face penalties of up to $1.1 million if they are seen to be engaging in misleading or deceptive conduct, and the ACCC is serious about targeting fake or misleading reviews. Most recently, in January this year, the Federal Court ordered that P & N Pty Ltd and P & N NSW Pty Ltd (trading as Euro Solar) and Worldwide Energy and Manufacturing Pty Ltd (WEMA, formerly trading as Australian Solar Panel) pay combined penalties of $125,000 for publishing fake testimonials and making false or misleading representations about the country of origin of the solar panels they supply.
The ACCC guidelines are available here.
A meaty dispute recently arose between a small hamburger shop and fast food giant Hungry Jacks. The take-away shop, in Wamberal on the Central Coast of NSW, has been serving the ‘Wambie Whopper’ for 20 years. It was reported that Hungry Jacks wrote to the owners, requesting that they stop using ‘whopper’ in their shop name.
When news of the letter broke on Facebook, Hungry Jacks was grilled on social media, with fans of the burger rallying to support the shop. Long-time Wambie Whoppers customer Matt Burke mustard huge support via Facebook by setting up the page ‘Save the Wambie Whopper’. The page received over 29,000 ‘likes’. A petition on change.org received over 5,000 signatures and Hungry Jacks’ own social media accounts were inundated with comments and criticisms.
Hungry Jacks found itself in quite a pickle, and following the backlash, the company withdrew its request.
The sauce of Hungry Jacks’ claim was likely based on trade mark and trade practices law. The word mark ‘Whopper’ was registered in December 1997 by the Burger King Corporation. However, if the term ‘Wambie Whopper’ was in use before the date of registration, the shop may have had a defense to any claim of trade mark infringement under the Trade Marks Act. The owners of Wambie Whoppers could have even considered taking action against Hungry Jacks under section 129 of the Trade Marks Act on the basis that Hungry Jacks had no grounds for making the threat.
It is also unlikely that Hungry Jacks would have been able to successfully argue that use of ‘Wambie Whopper’ is misleading and deceptive under the Australian Consumer Law. Lettuce be honest, it seems highly improbable that a reasonable consumer would consider that an association or connection exists between Hungry Jacks and Wambie Whoppers.
From a PR perspective, it seems to us that Hungry Jacks flipped out unnecessarily, to the detriment of its brand and reputation. As corporate conglomerate Unileaver found out earlier this year when it issued a legal letter to popular gelato bar Gelato Messina, strictly enforcing legal rights is not always the best course of action to take.
Poor Qantas. In recent times the airline has suffered many a social media mishap. Back in 2011 their Twitter hashtag #qantasluxury was hijacked by unhappy customers who delivered an unprecedented number of cuttingly sarcastic and highly critical responses. In 2012 the airline battled to remove a snarky parody PR account from Twitter. The most recent incident occurred in July this year when a hardcore pornographic image was displayed for about 7 hours on the Qantas Facebook page, much to the shock of an 8 year old boy and his father.
Of course Qantas is only one of many brands to suffer at the hands of social media. Australia’s Next Top Model recently had their promotional hashtag #antmselfie hijacked by feminist group Collective Shout, who claimed the competition was superficial and encouraged sexualised behaviour. The group’s actions drew attention to photo entries from girls as young as 9.
So what can you do to minimise the legal risks and avoid being featured in one of the many online articles gleefully titled ‘Companies that have made Huge Social Media Mistakes’?
Australian Law and Guidelines
In Australia, social media moderation is a hotly contested subject. The Australian Competition and Consumer Commission (ACCC) and a number of industry bodies have released somewhat conflicting guidelines, as summarised below.
The ACCC has made it clear that it considers content on social media sites to be advertising and/or marketing communications. Importantly, this means that competition law applies to such content.
Accordingly, brands have a responsibility to ensure content on their social media pages is accurate, irrespective of who put the content there. Brands will be held responsible for user posts or public comments made on social media pages which are false, misleading or deceptive if the brand knows about them and decides not to remove them.
In regards to moderation generally, the ACCC says that the amount of time a company needs to spend monitoring its social media pages depends on the size of the company and the number of fans or followers they have.
Australian Association of National Advertisers (AANA)
The AANA has stated that its self-regulatory codes apply equally to digital and traditional media.
For brands that are interacting and participating actively on a digital platform, the AANA Best Practice Guideline ‘Responsible Marketing Communications in the Digital Space’ recommends brands moderate at least once every business day. Brands should also moderate immediately after posting or engaging online and for at least 2 hours following a post.
Interactive Advertising Bureau (IAB)
Unlike the ACCC and the AANA, the IAB believes that user comments directed towards a social media platform do not constitute advertising. However, user comments can be converted into promotional statements through an organisation’s direct endorsement or expression of agreement. Further, the risk of an organisation becoming responsible for a user comment on its social media platforms increases once it has been made aware of the comment and it has had the opportunity to review it and take appropriate action.
In its new publication ‘Best Practice for User Comment Moderation’, the IAB suggests that companies moderate comments to the extent their resources allow. At a minimum, this should involve reviewing and moderating recently published comments at the same time as posting a new comment. The IAB notes that brands should increase their moderation if they are engaging in online interaction that is provocative, and designed to illicit controversial responses.
So what should you do?
When it comes to social media moderation, a common sense approach is best. Brands should moderate their pages regularly, taking into account the extent and activeness of their social media presence. For large international companies such as Qantas, this may mean consistent monitoring 24 hours, 7 days a week. For smaller brands, this may be once a business day. All brands should remove posts that are, or are likely to be, false, misleading or deceptive, defamatory, offensive or which breach intellectual property laws as soon as the brand becomes aware of them.
Most importantly, all companies should have in place:
- A social media policy, which sets out employer expectations around professional and private use of social media;
- Community manager guidelines, which set out clear company policies and practices around moderation and the removal of offensive or illegal content;
- House rules/community guidelines, which set out the standards expected from community users; and
- A crisis management plan, in case something does go amiss.
Of course, in an ideal world you will never have to use that crisis management plan!
Stephen von Muenster, Principal at von Muenster Solicitors & Attorneys, will present at the Communications Council Social Media Legal Seminar & Launch of Social Media Code of Conduct.
The presentation will discuss the potential issues, opportunities and pitfalls agencies and brands might face in the developing communications landscape. Stephen will also discuss the need to manage your risk and be aware of your legal and ethical accountability, along with providing tips on legal compliance in the social media space.
This seminar is particularly pertinent given the recent ruling from the Advertising Standards Bureau on the use of Facebook as an ‘advertising medium’. You can find out more about this issue and recent changes in the regulatory landscape here.
The sold out event is being held at the Surry Hills Library on Monday, September 10. A second seminar will be held on September 27 at the same venue from 5:00pm click here to book a ticket.
The industry has been abuzz with the ruling from the Advertising Standards Bureau (ASB) that content on a brand’s Facebook page is considered to be advertising and/or marketing communications. Many of our clients have been calling to enquire about the consequences for the industry and how the ruling may impact their or their clients’ Facebook pages.
The decision by the ASB is in line with a decision of the Federal Court in 2011. In Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2)  FCA 74 the Federal Court held that health company, Allergy Pathway, was liable for postings of third parties in social media because it had control over its social media pages, knew that misleading testimonials had been posted on Facebook and Twitter, and took no steps to remove them.
The recent determination of ASB regarding Diageo’s Smirnoff Facebook page has extended the reach of the Federal Court decision by stating that provisions of the Advertiser Code of Ethics (the Code) apply to an advertiser’s Facebook page and to content generated by advertisers, as well as material or comments posted by users or friends. The ASB found that a Facebook page falls within the definition of advertising and marketing communications under the Code and is not merely a networking tool used by existing customers.
In a decision of the ASB on the same day as the Smirnoff decision, the ASB found that the VB Facebook page had breached various provisions of the Code. Again the ASB found that the Facebook page was a marketing communication tool and that the provisions of the Code applied to content created by VB as well as content posted by users or friends. Importantly, the ASB noted that the VB Facebook page user comments, identified in the complaint, were posted in reply to questions posted by VB.
The above decisions closed a perceived loophole, which allowed brands to benefit from social media without accepting responsibility for content posted by advertisers or customers on Facebook, which would have otherwise been inconsistent with the Code or a breach of the Competition and Consumer Act 2010 (Cth) (the Act). In particular, s18 of the Australian Consumer Law in Schedule 2 of the Act, prohibits misleading or deceptive conduct.
In an article published by the Canberra Times, the Australian Competition and Consumer Commission (ACCC) backed the determination of the ASB. The competition watchdog sent a warning to large companies with a wealth of resources at their fingertips – if comments are not removed within 24-hours then the company will face potential court action.
If the ACCC’s past modus operandi is anything to go by, an ACCC prosecution of a large company who has not obeyed the ACCC stated view will usually follow.
While the ASB has so far refused to issue specific guidelines on social media policy, here at von Muenster we expect that the ACCC will release industry guidelines in the near future.
What does all this mean for agencies and their clients?
Community managers will now have to be vigilant in monitoring their social networking pages to ensure that all content posted by any person is not in breach of the Code or in contravention of the Act. It will on a case by case basis be necessary to moderate, respond to or even remove content posted by a brand’s Facebook page users. Community managers should also undertake training on the requirements of the Code and the Act to ensure they are able to identify posts by third parties which may be problematic. This training should not just be linked to infringements under the Code or Act but also other applicable laws, including defamation, copyright, trademarks, causing offence and racial discrimination.
It is difficult to provide a precise formula or guide as to what content or posts should be left, moderated or removed. Different rules apply under the self-regulatory Code and applicable laws, such as the Australian Consumer Law which forms part of the Act. Each situation turns on its own facts and circumstances, and often one will have to consider numerous factors, including the nature of the Facebook page and the advertiser; the nature of the products; the audience that is engaging with the Facebook page; the effect of other related marketing communications; and the overall context. It will be important to seek legal advice on a case by case basis if unsure.
At the end of the day, a commonsense approach will need to be taken. If a post or content is suspicious, offends, is blatantly wrong or could cause a is representation to other Facebook page users, then you need to ask the question: ‘do I moderate, remove or leave the post’? The Code and other applicable industry codes (for example the ABAC alcohol code) are quite straightforward and should readily be able to be applied to what is being posted on Facebook pages.
Section 18 of the Australian Consumer Law is a little more complicated. As stated above this section prevents misleading or deceptive advertising claims and is designed to protect consumers. It applies to Facebook and other social media sites, including posts by users (see Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd discussed above). Not all posts that are incorrect or inflated will be misleading. The posts need to be considered against the Facebook page as a whole – the other posts, posts by the advertiser and the context. The audience of the Facebook page needs to be considered and then the message that is being conveyed to that audience needs to be ascertained – if the message is misleading or constitutes a misrepresentation to a reasonable member of the audience of the Facebook page, then it is possible there will be a breach of Section 18.
Personal opinions, puffery – ‘hey this is the best drink in the whole world’ – and other forms of social banter are unlikely to lead others into an erroneous assumption about the brands products. It is where the brand puts out a misleading message or allows a misleading message to develop, and the responding posts reinforce or amplify this message, where we see possible breaches occurring. The possible spectrum of situations are endless and again, each Facebook page and situation will need to be assessed on its own merits.
If an organisation is active in social media and is engaging on a frequent basis, then for larger organisations with greater resources, it is likely that the response time to moderate or remove offending content may be as little as 24-hours, however this is by no means law at this time and awaits a judicial pronouncement.
Please get in touch if we can be of any further assistance in helping you and your clients navigate the implications of these decisions.
A common question asked of our team members is: ‘if a defamatory comment is posted on our social media page, would we be liable?’ To answer this question, we have provided a brief overview of the law as it currently stands.
The nature of social networking sites lends itself to the inherent risk of a consumer posting a defamatory comment on the site, being a comment that could:
- injure the reputation of a person by exposing them to hatred, contempt or ridicule;
- cause others to shun or avoid a person; or
- lower a person in the estimation of others.
Liability attaches at time of publication (and re-publication) of a defamatory comment, including on a brand’s own site, Facebook or Twitter page. But who is liable for the defamatory publication?
The author, being the consumer who posted the defamatory comment, will usually be liable. But the defamed person will often not pursue the author, due to the difficulty that online anonymity/pseudonymity may pose in identifying the author or the simple fact that the author’s pockets are typically not as deep as those of the brand.
It is unlikely that a social networking host or provider, which provides the platform itself (i.e. Facebook, Twitter etc.), will be regarded as publishing, or even as authorising the publication, of the defamatory material, given its role as platform host/provider is a passive one. In the recent English decision of Payam Tamiz v Google Inc, Google UK Limited  EWHC 449 (QB), Justice Eady agreed with Google’s argument that it merely provided access to the communications system Blogger.com and did not create, select, solicit, vet or approve the content on the system – this is all controlled by the blog owner. Justice Eady summarised:
“… it may perhaps be said that the position is, according to Google Inc, rather as though it owned a wall on which various people had chosen to inscribe graffiti. It does not regard itself as being more responsible for the content of these graffiti than would the owner of such a wall.”
Even if the social network host or provider is deemed to be a publisher, it may be afforded protection in Australia as an ‘internet content host’ (ICH) or ‘internet service provider’ (ISP) under section 91 of Schedule 5 of the Broadcasting Services Act 1992 (Cth), although this has not yet been determined with respect to defamation in Australia (see our blog ‘Twitter sued for Defamation’ on this point). Section 91(1) of this Act states that any law of a State or Territory, or rule of common law or equity, has no effect to the extent to which it subjects an ICH/ISP to liability for hosting or carrying particular internet content of which it was not aware or requires an ICH/ISP to monitor, make inquiries about, or keep records or, internet content that it hosts or carries.
The question however remains whether a brand operating a social networking site will be deemed to be the publisher of defamatory comments of users of their site and accordingly liable. The law in Australia is largely untested. Liability will likely depend upon the extent of control exercisable by the brand over what is published on their site as well as the brand’s knowledge of the defamatory material on their site.
In terms of control, Facebook, for instance, affords significant control to the page owner, including control over who can post, control over who can view the posts, and the power to delete posts. However, just because a brand may have the technical capability to take down defamatory comments on their site does not automatically deem them to be a publisher.
The brand’s knowledge of the defamatory material must also be considered. Does the brand authorise the publication of the defamatory matter or merely facilitate it? If the brand is found to be a publisher, the answer to this question will determine whether the brand may avail themselves to the defence of innocent dissemination, which applies “to those who participate in the communication of defamatory matter but do not authorise that communication” (Thompson v Australian Capital Television Pty Ltd (1996) 186 CLR 574 per Gaudron J).
But when may a brand be found to ‘authorise’ the defamatory matter – at time of posting, when the brand becomes aware of the defamatory comment, or never? This issue has been considered for the purpose of contempt, where it was held that the publisher “accepted responsibility for the publications when it knew of the publications and decided not to remove them” (ACCC v Allergy Pathway Pty Ltd and Anor (No 2)  FCA 74 per Finkelstein J).
Therefore, if your brand exercises sufficient control to be able to take down defamatory material from its social networking site, and fails to do so within a reasonable time of notification of the existence of the defamatory material, it may be held responsible for the continued publication of the defamatory material. It is however uncertain whether your brand can merely rely upon users of its site to notify them of the defamatory material, or whether it must actively monitor content on its site. As a risk management strategy, we recommend moderating content on your brand’s site on a frequent basis and taking down any defamatory content as soon as reasonably practicable, so that your brand is not the one that ends up resolving this question before the courts.