Social media - Manage the risks and leverage the power


Social networking sites like Facebook, LinkedIn and Twitter are increasingly recognised as legitimate marketing tools and vital to the digital marketing strategy of major consumer brands, universities, government and even law firms. It seems that if you’re not on Facebook, you don’t exist.

At its most basic, social media is a category of sites driven by user participation and user-generated content.  But this is not where its true power lies: Social media has revolutionised the way consumers connect with brands, connect with other consumers to discuss brands, and source other consumers’ opinions about brands.  Jenny Craig’s recent withdrawal as a sponsor of Austereo’s Kyle & Jackie O show is but one example of the power of social media to influence corporate decision making. 

There are however legal issues and potential pitfalls associated with incorporating social media as part of any digital marketing campaign, both as brands and employers.  Legal issues arise as a consequence of how these sites are regulated (or not regulated) in Australia and the limited protection afforded to users under the sites’ terms of use.  Most of these issues can be avoided by common sense and good corporate governance, but some issues need managing more closely.  

How is social media regulated in Australia?

There is no specific social media law or regulation in Australia, yet. 

The absence of social media regulation is unlikely to continue.  The US and UK governments have already introduced social media regulations and guidelines specific to social media sites.  And a number of State Governments in Australia have released social media guidelines for their departments and agencies.  Online regulation is also a particular focus for the Federal Communications Minister Stephen Conroy.  The current Convergence Review of media regulation in Australia looks set to extend some of the existing ‘traditional media’ regulation to new media that provide content services. This definition includes social networking sites.   However, the existing regulation is more directed at the nature of the content on the site and the protection of children using these sites; not the protection of the commercial interests of those using the sites for marketing, communications or other purposes. 

Terms of Use

At its heart, the use of a social networking site is a contractual relationship between the user and the site operator (subject to proper contract formation).  The terms of the contract are recorded in the site’s terms and conditions (or Terms of Use), which set out the rights and obligations of the user and are generally in favour of the operator of the site.  There is unlikely to be an opportunity to negotiate the terms.  If an organisation is investing in its social media presence, then its investment is subject to these non-negotiated Terms of Use.  Therefore, it is critical to understand the risks inherent in these terms before launching a social media campaign. 

The Terms of Use for the key social networking sites are mostly along the same lines: the user agrees to comply with certain “rules of engagement” with regard to conduct and the site operator excludes all liability and reserves the right to remove any content that it deems inappropriate.  Some of the key terms are summarised in the table at the end of this article, but the terms of the particular site should be closely read before registering a user account and investing heavily in a social media presence on that site.

Whilst the Terms of Use govern the relationship between a user and the site operator, there is no contract between the users of a social networking site.  Conflicts between users would be resolved using general legal remedies, such as copyright infringement or defamation. 

The potential for disputes between users, or between users and third parties, is demonstrated by one of the newer social networking sites, Pinterest.  This site allows users to create a virtual pinboard of photographs and other images, whether they are the user’s own images or (as is more likely to be the case) third parties’ images found online.  The site encourages users to share their virtual pinboard with the site’s community of users.  Pinterest’s Terms of Use provide that, among other things, the user must have the copyright owner’s permission to “pin” content and the usual indemnity is given by the user for a breach of this obligation.  Looking at the vast array of mostly professional photographs and images “pinned” by users of this site, it seems unlikely that each user has the permission of the relevant copyright owner for each image.  Under Australian copyright law, it is unlikely that a user would be able to argue that the fair dealing exceptions to copyright infringement apply to the pinning of the copyright materials.  Given the increasing number of copyright infringement complaints being made to Facebook by photographers and other copyright owners, it is only a matter of time before further attention is given to Pinterest. 

Different medium, same rules

Regardless of any Terms of Use, social media is just another medium for corporate communication.  The laws and regulations that apply to what is said and done in the real world, equally apply to what is said and done on a social networking site.  This was enforced by a recent decision of the Federal Court in ACCC v Allergy Pathway, where the court confirmed that a company is responsible for misleading and deceptive content (made in testimonials) posted to its Facebook wall, of which the company was aware and had the power to remove, but did not. 

Social media is also becoming a factor in litigation disclosure. Information posted on social media websites may be discoverable if a posting is relevant to a dispute or legal proceedings.

Accordingly, posts to social networking sites and other activities in social media should be subject to the same practices and procedures as apply to other corporate communication: they must comply with applicable corporations laws (such as listing rules), competition and consumer laws (such as misleading and deceptive conduct as to good and services, pricing), advertising standards and codes of practice, financial services regulations and privacy, to name a few.  For government departments and agencies, there is also a need to consider whether posts are public records or could be the subject of a Right to Information request.  

Practical tips

There are, of course, a myriad of commercial and legal issues to consider before launching a social media campaign.  Here are some practical tips for managing the legal issues associated with using social media:

  • Put in place a social media policy.  This policy should outline how your organisation will engage in social media, your strategy for handling problems that may arise, and who is responsible for the organisation’s social media engagement.  Your social media policy should also outline permitted use of social media by your employees; employers may be vicariously liable for their employees’ use of social media.  As with any policy, ensure that it is properly implemented and regularly reviewed and updated. 
  • Train employees charged with posting to social networking sites on behalf of the organisation, so that they understand the importance of ensuring their comments accord with your social media policy, the law and any industry-specific regulation that applies to the organisation. 
  • Pre-empt brand jacking and cyber-squatters by registering social networking accounts or user names for your brands and products.  Generally, once a user name has been registered, it cannot be reused.  There is no fee for registering a user name with social networking sites like Facebook, Twitter and LinkedIn.  Even if you decide not to engage in social media, there is a risk that someone else will use your brand online and dilute its value.
  • Monitor the use of your brand and intellectual property in social media.  Most social networking sites have a clear procedure for reporting fake accounts, take-down policies and complaint handling processes for disputes.  These processes will not be appropriate or properly resolve the dispute in all circumstances and you may need to consider traditional, litigious mechanisms, which can be expensive and time-consuming.  Sometimes, a conciliatory approach to IP infringement may be better.
  • Extend your privacy compliance practices to social media.  Just because information is posted to a social media site does not mean that it is no longer personal information.  The Terms of Use generally prohibit the use of user information for commercial gain and collection of user information without first obtaining the individual’s consent.  These requirements should be reflected in any social media policy that you adopt.  If you are collecting personal information through, for example, running a competition on your Facebook fan page, consider also how you will incorporate your privacy policy. 
  • Closely read the site’s Terms of Use. Whilst the majority of the social networking sites have similar terms, there are differences and it is important to read and understand the terms before investing heavily in a presence on each site. 
  • Think before you tweet.  Comments, tweets and posts to social media sites could be discoverable in litigation.  The same degree of rigour should be applied as would be applied to any other statement from your company.


Ownership retained by user but wide licence granted to operator


Consent to transfer of personal information to US


Any time with or without notice/reserved right to terminate user account


Indemnity for third party claims


Reporting process for fake accounts/Take-down notices/dispute resolution in the US
















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.

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Helen Clarke

Partner. Brisbane
+61 7 3228 9818