Companies may have to radically rethink their social media marketing as a result of decisions by the Advertising Standards Board.
The decisions involving Victoria Bitter and Smirnoff confirm the position emerging from Australian courts, that brand owners must take responsibility for user posts on their social media pages. They put the onus on brand owners to actively moderate user posts and ensure they meet Australian advertising standards.
The Advertising Standards Board investigated a complaint that content on the Facebook page for Victoria Bitter beer breached the Australian Association of National Advertisers Code of Ethics.
The Board determined that an advertiser’s Facebook site is a marketing tool over which the advertiser has a reasonable degree of control and that the site is designed to promote the product. On that basis, the Board determined that the Code applies to a brand owner’s Facebook page. Crucially, the Board further determined that the Code applies to all contents on the page – i.e. both the content posted by the brand owner and material or comments posted by users.
The Board held that the Code was breached because some user posts on the VB Facebook page were discriminatory toward women, degrading to homosexual people, used strong and obscene language and did not treat sex, sexuality and nudity with sensitivity to the relevant audience.
In its determination, the Board indicated that social media requires monitoring to ensure that offensive material is removed within a reasonable timeframe to ensure compliance with the Code.
Another recent determination by the Board involved the Australian official Facebook page for Smirnoff Vodka. Diageo, the brand owner, unsuccessfully argued that Facebook is a communications channel just like TV and radio and therefore it is not appropriate to consider all content as advertising material. The Board again expressed its view that the Code applies to content generated by advertisers as well as material posted by users – however in that case, none of the content was found to breach the Code.
The Board’s views are broadly consistent with the position emerging from Australian case law.
In the case of ACCC v Allergy Pathway (No. 2)  FCA 74 the Federal Court held a company and its sole director liable for contempt of court in relation to posts on the company’s Twitter and Facebook pages.
The company and director had previously undertaken to the Court not to publish certain misleading representations about the company’s services for treating allergies. After that undertaking was given, third parties posted testimonials on the company’s Twitter and Facebook pages, endorsing the company’s allergy treatments. The Court held that the third party posts led to contempt of court by the company and director because they knew that the testimonials had been posted but did not remove them. According to the Court:
…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.
In reaching the above view the judge relied on defamation cases. Therefore the above logic could apply if a user posts defamatory material on a company’s social media page and the company, knowing that the post has been made, does not remove it. Similar logic might apply in relation to material that infringes copyright or breaches a range of other laws.
To avoid breaching advertising standards, companies need to moderate posts to their social media sites and may be held accountable if inappropriate material is not quickly removed. Presumably the same logic would apply to a company’s website, if it is possible for users to post material to the site.
This could mean that companies have to devote significantly more resources to moderation, or else change their whole marketing approach to involve less interaction through social media and websites. Moderation should be conducted by staff who are given clear guidance by the brand owner and who are capable of making sensible judgments.
To eliminate risk completely, moderation would have to be carried out 24 hours a day, every day of the year. Since this is not commercially viable for many brand owners, they will have to come to a view about how often they should moderate in order to contain risk. In its response to the VB determination, the brand owner indicated that it now conducts twice daily monitoring of user comments including removal of inappropriate comments.
Brand owners can further limit their risk exposure by using some features offered by Facebook. For example, it is possible to restrict a Facebook page so that it can be viewed only by persons in a certain age demographic, e.g. over 18, or only by persons in particular countries.
Facebook also enables a page administrator to blacklist words so that comments containing those words are visible only to the commenter and their friends. In addition, particular users can be flagged so that their comments are only visible to themselves and their friends.
While these features limit the audience viewing potentially problematic posts, they do not completely eliminate the risks for the brand owner. The comments could still breach advertising standards or include, for example, defamatory material for which the brand owner might be held responsible.
The clear message for brand owners is that they must actively moderate user posts on their websites and social media pages. It is to be hoped that they do not become too conservative in their judgments and remove all “borderline” material so that these valuable opportunities for interaction with consumers become anodyne and unengaging.
An expanded and updated version of this Insight was first published in the September 2012 edition of the E-Commerce Law Reports - click here to view a PDF of this journal article. Click here to see this journal article on the E-Commerce Law Reports website (subscription required).
The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.