Taming the trolls – social media risks for business

Jonathan Forsey


Most businesses would accept they should be responsible for material they post on social media platforms hosted by them. 

For example, if a business touts services or products on its Facebook page, then those representations would come under the Fair Trading Act and others in the same way as a brochure or website produced by the company. 

What is more controversial is the extent to which companies hosting social media platforms are responsible for third-party user-generated content which is present on those sites – but not directly produced by the company in question. 

The spotlight has been thrown on this issue by the recent publication by the Advertising Standards Authority of its guidance note on social media.

Complaints would have to be considered on a case-by-case basis, but it is clear that
user-generated content could be regarded as advertising in situations where, for example:

  • It was originally solicited from individuals and then adopted within a company’s own advertising.
  • Where unsolicited information was subsequently adopted and incorporated.
  • Where, for example, an advertiser solicited user-generated content which was then posted on the site. 

Unless the advertiser has a reasonable degree of control over the social media platform and use, and is promoting a brand or service to the public, it is outside the jurisdiction of the ASA. 

The New Zealand guidelines come in the wake of recent decisions of the Australian Advertising Standards Bureau, where advertisers were held responsible for moderating comments on their Facebook page. 

In July 2012, the bureau considered a complaint in relation to a Facebook page for VB beer which featured questions posted by the advertiser and comments from members of the community. The comments included coarse language and sexual reference.

The advertiser, Fosters Australia Asia & Pacific, argued that user comments are not “advertising or marketing communications”.  While there was an ability to monitor and remove user comments from the VB page, the advertiser argued that pre-moderation was not feasible. 

The bureau disagreed and considered that the Facebook site of any advertiser is a marketing communication tool over which the advertiser has a reasonable degree of control. 

It said the Advertising Code applies to the content generated by the page creator as well as material or comments posted by users or friends. 

Adopted in Australia
A broad view of the responsibility of advertisers for social media content has been adopted in terms of consumer law in Australia. 

The Australian Competition and Consumer Commission has said that it views any false or misleading comments on a brand’s social media page, including Facebook, as part of its marketing communications, regardless of whether it is user-generated or brand-generated.

In a recent case brought by the ACCC against Allergy Pathway Pty Ltd in New South Wales, the Federal Court held that the company was in contempt for information posted by third parties on the wall of its Facebook and Twitter pages.

While the comments were published without the knowledge of Allergy Pathway, the court held that the company had, in effect, accepted responsibility for them by failing to remove the statements. The ACCC position was upheld and the directors of Allergy Pathway fined.

There is no reason to assume that a similar approach would not be adopted in New Zealand. 

The decision serves as a warning to those businesses who have turned to social networking sites as a marketing tool. 

Such businesses need to take steps to monitor the use of Facebook and Twitter pages to ensure users have not published false, misleading or deceptive comments. If any such comments are not removed, the business may be held liable as a result.

Jonathan Forsey is a special counsel and a specialist in privacy and social media law at Duncan Cotterill


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2 Comments & Questions

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The law needs to get with the 21st century and allow for a reasonable process of complaint/report/removal rather than expecting businesses to monitor all posts in real time or moderate them prior to posting.

I haven't seen any recognition of this need from our legal profession.

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It would seem the ACCC disagrees with you. If a business wants to embrace social media, then they best be competent with managing it or deserve to get slugged as per across the ditch.

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