Social media is an excellent medium that many modern day businesses can use to keep in touch with their clients and customer base. It is accessible and easy to publish statements and claims at the touch of a button, whether this is on Twitter, Facebook, Instagram or LinkedIn. However, what many businesses aren’t aware of is that a post or tweet is not exempt from the laws that apply to traditional advertising or interactions with users. There is a risk when using social media to forget about laws such as competition and consumer law, advertising codes, copyright and privacy obligations. If your business relies on social media as an advertising channel, you need to play by the rules. Use this Spring to clean up your business’ social media policy and understand your legal obligations. Below, we set out the rules you need to abide by and some practical tips to help comply.

1. Australian Consumer Law (ACL)

Businesses should remember that the law views social media in the same way as other traditional communication channels. As such, section 18 of the Australian Consumer Law (ACL) prohibits businesses from engaging in misleading or deceptive conduct (e.g. through their advertising or marketing material).

Consider the decision in Seafolly Pty Ltd v Madden [2012] FCA 1346 whereby the Court found that the ACL applied to comments made on social media. Ms Madden posted several photos on her Facebook page, falsely suggesting that Seafolly had ripped off her swimsuit designs. The Court found this to be misleading and deceptive and consequently awarded Seafolly $25,000 plus damages.

2. Advertising Codes

The Advertising Standards Board (ASB) has deemed that Facebook pages and official social media channels are well within the scope of ASB’s review and standards codes.

For example, in 2012 ASB received a complaint regarding Smirnoff’s Facebook page, namely that it promoted sexist and inappropriate content. Although Smirnoff was not found to have encouraged this, the ASB found that Facebook pages are considered advertisements and within the scope of their review.

3. Third Party Compliance

The ASB regards social media to be a marketing and communication tool for the advertiser. The ASB then applies the advertising codes to both content created by third parties (e.g. customers) to which the advertiser has a degree of control over, as well as content generated by the business.

The Federal Court decision ACCC v Allergy Pathways Pty Ltd (No 2) [2011] FCA 74 confirmed that the owner of a Facebook or Twitter page becomes the publisher of third party content once they become aware of the content. Any decision by the business not to remove the content that may be false or misleading may render the publisher liable. In the case of Allergy Pathways, the Court found that statements, testimonials and Allergy Pathway’s responses to queries on the Facebook wall were published statements and they were ultimately liable for these claims.

4. Trade Promotions

Social media trade promotions may take the form of competitions or contests to engage users with your business. It is important to acknowledge that trade promotions are not affiliated or offered by the social media platforms themselves. Rather, you use these platforms to run your campaigns. For example, you might run a competition to give away a free product through Facebook. Regardless of the platform, you should be aware of the laws that may apply before you start your trade promotion.

Firstly, each social media platform regulates trade promotions through their respective terms and conditions and so it is sensible to stay abreast of any changes.

Secondly, the rules that apply to your trade promotion depend on location. It is often easy to forget your social media is accessible to all Australians. Each state and territory will have their particular rules for trade promotions. For instance, you might want to announce the winner of your competition via Facebook, but the actual rules in that state only allow you to notify the winner face-to-face or via telephone.

In particular, different rules will apply based on the type of trade promotion you run. The two key types of trade promotions include:

  • Game of skill (contests); and
  • Game of chance (lottery/sweepstakes).

Businesses typically run games of chance competitions on social media, such as, “like this photo to win” campaigns, where the outcome is based on luck and not skill.

Game of chance type promotions require a permit and each state has their respective permit fees. It will also be prudent to publish trade promotion terms and conditions and explicitly mention the rules that apply to each state or territory. These will ensure you are compliant with the overarching rules of each state where you will run the competition.

Also, note that the ASB will consider social media trade promotions as advertisements. Lingerie company Bendon was in murky waters for a Facebook campaign run in 2012, where they encouraged participants to post a “selfie with their bestie” to win weekly lingerie prizes. The ASB found that this particular advertising campaign breached a code of ethics as it encouraged young women to post revealing photos of themselves.

5. Privacy and Confidentiality

Just like a website, you should not neglect the way you treat personal user information you collect. Personal information identifies an individual, and if your business is subject to the Privacy Laws, then it must comply with obligations in the Privacy Act when dealing with personal information. The social media platform will usually have their privacy policy in place. However, it is important to disclose how your business also interacts with personal information and instil confidence in your customers.

6. Copyright Clearance

It is easy to overlook that photographs and images available online are not always free to use. Copyright is often at play and these media often belong to the creator. If you don’t have a licence to use the material in your advertising and you are recycling someone else’s images, you may be breaching copyright laws. You will require copyright clearance for any material you use on your site that you have obtained from a third party.

7. Risk Management

From a compliance and risk management perspective, your business should consider employing a social media policy. A dedicated social media manager monitors and enforces this policy as well as trains your staff on appropriate social media use.

The policy should reflect the importance of processes to correct and amend any misleading, deceptive or defamatory statements efficiently. Social platforms should be monitored to ensure third party comments that may constitute a breach of legal obligations are deleted or corrected.

Key Takeaways

Don’t just leave your social media clean up for Spring! Social media is a long game and you should invest the necessary time to remain compliant with the rules. Some key points to take away include:

  • Implementing a social media policy for your business and in-house rules;
  • Conducting staff training on legal compliance and how to use your policy;
  • Understanding that social media site owners have a positive obligation to manage and moderate social media content, including content generated by third parties to ensure compliance;
  • Recognising inappropriate content that breaches the advertising code, ACL or is defamatory should be removed or amended as soon as possible for small companies or within 24 hours for larger companies;
  • Realising that social media is efficient and fast paced, but this does not mean that you can avoid the law by posting misleading content;
  • Having a trade promotion review policy available, so you understand the different state obligations; and
  • Implementing a privacy policy.

If you have any questions about complying with the ACL or require assistance drafting a social media policy, get in touch with our team of advertising, marketing and consumer lawyers on 1300 544 755.

Sophie Glover

Next Steps

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