Allens

Litigation & Dispute Resolution

Focus: Beware of liability for third-party posts on social media

18 September 2012

In brief: The Federal Court and Advertising Standards Bureau have determined that businesses are responsible for third-party comments posted on their Facebook and Twitter pages, and may be in breach of consumer laws and advertising standards if those comments are misleading or offensive. Partner Duncan Travis (view CV) and Lawyer Nadia Guadagno report on these decisions and their implications.

How does it affect you?

  • Businesses will be held liable for comments posted by third-party users on their Facebook and Twitter pages if the comments contravene consumer laws, eg by being misleading and deceptive.
  • Such third-party comments are regarded as advertising or marketing communications under the Australian Association of National Advertisers Code of Ethics (the Code). If those comments are offensive or discriminatory, the business will be found to have breached the Code.
  • If you want to use social media pages to promote your business, you must implement procedures to regularly monitor user comments and remove any content that is misleading, offensive or discriminatory.

The Federal Court decision

In 2009, the Federal Court found1 that Allergy Pathway had contravened sections 52, 53(aa), 53(c) and 55A of the former Trade Practices Act 1974 (Cth) (the TPA) by falsely representing that it could test for allergens and that it could safely cure and treat all allergies. Allergy Pathway and its sole director, Paul Keir, gave undertakings to the court that they would not publish statements making such representations.

In 2011, the ACCC alleged that Allergy Pathway was in contempt of court by breaching the undertakings through various publications, including testimonials written and posted by clients on Allergy Pathway's Facebook 'wall'. This raised the question of whether Allergy Pathway was responsible for, and had 'published', the third-party testimonials.

Justice Finkelstein held that:

While it cannot be said that Allergy Pathway was responsible for the initial publication of the testimonials (the original publisher was the third party who posted the testimonials on Allergy Pathway's Twitter and Facebook pages) it is appropriate to conclude that Allergy Pathway accepted responsibility for the publications when it knew of the publications and decided not to remove them. Hence it became the publisher of the testimonials.2

The court ordered:

  • Allergy Pathway and Mr Keir be fined $7500 each;
  • injunctions restraining Allergy Pathway and Mr Keir for three years from publishing statements representing that Allergy Pathway could accurately test for allergens and safely cure and treat a person's allergies;
  • Allergy Pathway to pay the ACCC's costs on an indemnity basis; and
  • Allergy Pathway publish corrective advertising in the form of a notice to be affixed to the front counter of its clinics, a notice on its websites, Twitter and Facebook pages, and a letter to be distributed to all of its customers, explaining that Allergy Pathway and its director had been found guilty of contempt of court.

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The Advertising Standards Bureau decisions

The Advertising Standards Bureau (the ASB) has recently handed down two rulings determining that the Facebook page of a business is a 'marketing communication tool over which the advertiser has a reasonable degree of control'3, and therefore an advertising or marketing communication covered by the Code. The ASB decided that the Code 'applies to the content generated by the page creator as well as material or comments posted by users or friends' (emphasis added).4 The ASB concluded that social media 'requires monitoring to ensure that offensive material is removed within a reasonable timeframe.'5

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The Fosters case

The Fosters case concerned the VB Facebook page, which featured questions posted by the advertiser and comments from its fans, which included coarse language and sexual references. Fosters submitted that the user comments on its page had to be considered in context – ie the 'tongue in cheek and ironic' tone of the VB page and the demographic principally targeted by VB, being males aged 35 plus, 'comfortable with swearing' and for whom 'no words are taboo'.

The ASB determined that a number of comments posted on the Facebook page were discriminatory toward women, derogatory and degrading toward homosexual people, contained inappropriate references to sexual activity and contained strong and obscene language and, as such, breached a number of the Code's provisions.6

After receiving the complaint, Fosters removed all of the offending comments from its Facebook page. It also implemented twice-daily monitoring of user comments, including removal of inappropriate comments, broader language filters, age restrictions, and an internal policy document addressing inappropriate topics and how to respond.

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The Diageo Australia case

The Diageo Australia case concerned the Smirnoff Vodka Facebook page, which featured photographs uploaded by Diageo Australia of young people at various events, some of whom were holding alcoholic drinks. A complaint was made to the ASB that the photos depicted excess consumption of alcohol by people under 25 years old, in breach of the Code's health and safety provisions.

The ASB dismissed the complaint, finding that none of the images appeared to indicate an excessive consumption of alcohol and that all of the images appeared to be taken in licensed premises, which restrict entry to those 18 years old and over.7 The ASB found that the Facebook page was not contrary to prevailing community standards on health and safety and did not breach the Code.8

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The ACCC's stance

Following the ACCC's success in the Allergy Pathway case, the then ACCC chairman, Graeme Samuel, stated: 'Many corporations now use Facebook Fan pages and Twitter accounts to promote their businesses. This outcome confirms that any business that decides to leave public testimonials or other comments on their Facebook and Twitter pages will be held responsible if they are false, misleading or deceptive.'9

In a recent interview, ACCC Commissioner Sarah Court said that she expected large corporations to remove misleading posts on their Facebook pages within a day.10

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Conclusion

The Federal Court and ASB decisions make it clear that businesses will be held responsible for comments posted by third-party users on their Facebook and Twitter pages if the comments contravene consumer laws, eg by being misleading and deceptive, and/or breach advertising standards in the Code.

Businesses need to implement procedures to regularly monitor the comments on their social media pages, and remove any content that is misleading, offensive or discriminatory. Considering the volume of traffic that some social media pages draw, and the instantaneous nature of postings to them, this may impose an onerous burden. However, as seen in the Allergy Pathway case, the consequences of non-compliance may be significant – businesses risk penalties, injunctions, negative publicity and damage to their reputation, particularly if they are required to publish corrective notices, and issue letters to their customers, describing the misleading conduct.

Footnotes
  1. ACCC v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74.
  2. [2011] FCA 74, [33].
  3. Advertising Standards Bureau Case Report, Case Number 0271/12, Advertiser: Fosters Australia, Asia & Pacific (11 July 2012); Advertising Standards Bureau Case Report, Case Number 0272/12, Advertiser: Diageo Australia Ltd (11 July 2012).
  4. Ibid.
  5. Advertising Standards Bureau Case Report, Case Number 0271/12, Advertiser: Fosters Australia, Asia & Pacific (11 July 2012).
  6. Ibid. If a complaint is upheld by the ASB, the advertiser is requested to remove or amend the offending advertisement.
  7. Advertising Standards Bureau Case Report, Case Number 0272/12, Advertiser: Diageo Australia Ltd (11 July 2012).
  8. Ibid.
  9. ACCC News Release 'Firm fined for testimonials by Facebook "fans" and tweeters' (11 February 2011).
  10. Lee, J, 'Warning to firms on Facebook comments', The Age, 13 August 2012.

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