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Australia – Liability For Third Party Content: Advertisers To Monitor Social Media To Ensure Compliance With Code.

29 September, 2012

 

Legal News & Analysis – Asia Pacific – Australia – TMT

 

Highlights 
 
  • The ASB rulings impose obligations on companies to monitor all activity, by the company itself and by third parties, on their social media accounts, such as Facebook and Twitter, to ensure compliance with the AANA Code of Ethics and the ACL. 
  • This follows on from the decision in ACCC v Allergy Pathway Pty Ltd which held that an advertiser has an obligation pursuant to s 29 of the ACL to remove testimonials uploaded to its social media accounts if they are misleading or deceptive about the relevant product or service.
  • Companies may need to institute new systems and policies to effectively monitor and evaluate content to ensure compliance with the Code and the ACL, which may increase the costs of maintaining an interactive presence in social media. 
 
The Advertising Standards Bureau (ASB) recently considered a consumer complaint (albeit one made by Queensland academics as a test case) regarding the official Facebook pages for Smirnoff, operated by Diageo Australia Pty Ltd (Diageo Australia), and VB, operated by Fosters Australia, Asia & Pacific. The ASB classified this type of site as a marketing communication tool and found that the scope of advertiser responsibility extends to Facebook sites maintained by advertisers. All content, whether generated by the advertiser itself or posted on the site by users, must be in compliance with the AANA Code of Ethics (Code), which may require the advertiser to track and remove content to ensure compliance.
 
This follows on from the Federal Court ruling in ACCC v Allergy Pathway Pty Ltd (No.2) [2011] FCA 74, where Allergy Pathway was held liable for the false, misleading or deceptive testimonials posted by users on its Facebook site. Allergy Pathway was found in contempt of court for failing to comply with the terms of a previous Federal Court ruling prohibiting it from making misleading claims about its allergy treatments.
 
Social media classified as marketing communication tools 
 
The classification of advertiser-operated social media accounts as marketing communication tools exposes these accounts to the legal standards imposed by the Code and the Australian Consumer Law (ACL). An advertising or marketing communication is defined in the Code as “material which is published or broadcast using any Medium… and over which the advertiser or marketer has a reasonable degree of control, and that draws the attention of the public in a manner calculated to promote or oppose directly or indirectly a product, service, person, organisation or line of conduct.” Companies may already monitor their accounts to assess whether user commentary accords with an internal policy or approach, but the ASB rulings on the Smirnoff and VB Facebook pages impose an obligation on a company to monitor all its social media accounts to ensure compliance with national standards.
 
Difficulties may also arise with regard to foreign advertising standards if other jurisdictions take a similar approach, given that an advertiser’s Facebook page may be viewed around the world.
 
The use of social media as a promotional tool introduces new forms of interaction between the advertiser and the customer and also between customers. A company may choose between varying levels of interaction. For example, Diageo Australia stated in its response to the complaint that Facebook users may only comment on images in its albums or on its page if they are tagged personally or are friends with the person tagged. Other sites may allow users to upload their own content onto the page, including images. Fosters Australia used the VB page to pose questions to their “fans”, and users would respond to that question and then to each other. 
 
It is possible that companies will choose to reduce the scope for consumer interaction on their social media accounts to reduce their potential liability and the costs of monitoring cyber activity, but this must be balanced against the benefits of direct insight into consumer opinion.
 
Removal of material in breach of the Code 
 
Section 2 of the Code sets out a number of prohibitions in respect of advertising and marketing communications, such as, regarding the portrayal of people or the depiction of material in a way which discriminates against or vilifies an individual or certain sections of the community. 
 
As a result of the ASB decision, Fosters Australia revisited its guidelines on social media and has now included strict mandatories, such as twice daily monitoring of user comments on its social media including removal of inappropriate comments. 
 
Section 29 of the ACL
 
The Allergy Pathway decision, which was cited by both complainants to the ASB, also imposes obligations on the controller of a social media page pursuant to s 29 of the ACL. Section 29 relates to false or misleading representations about goods or services. The issue in the Allergy Pathway case related to false or misleading representations appearing as testimonials on Allergy Pathway’s Facebook and Twitter pages praising Allergy Pathway’s treatments. Allergy Pathway knew that these statements were misleading and deceptive, but which failed to remove them from its Facebook site or Twitter account.
 
Even though the testimonials were posted by members of the public on Allergy Pathway’s Facebook page, Allergy Pathway was held to be the publisher of such user content due to the fact that it was aware of the testimonials but did not remove them.
 
The approach taken by the courts and the ASB is that the advertiser must take therefore responsibility for all content on its social media sites, which may include the removal of material in breach of the Code, whether generated by users or posted by the advertiser itself. There is uncertainty, however, regarding the degree to which the site must be monitored and how quickly the advertiser must remove any offensive material. This may depend on the size of the company and its number of ‘fans’ on Facebook or ‘followers’ on Twitter, for instance, which will determine, in part, the amount of commentary or other material that is posted on its site and which must then be reviewed.

  

 

 

 

For further information, please contact:

 

Donna Short , Partner, Henry Davis York

[email protected]

  

Hazel McDwyer, Henry Davis York

[email protected]

 

 

 

 

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