ASB and ACCC Rule, Facebook Not Just A Social Media Tool

August 16, 2012 Published by

Image: Marco Pakoeningrat

The industry has been abuzz with the ruling from the Advertising Standards Bureau (ASB) that content on a brand’s Facebook page is considered to be advertising and/or marketing communications. Many of our clients have been calling to enquire about the consequences for the industry and how the ruling may impact their or their clients’ Facebook pages.

The decision by the ASB is in line with a decision of the Federal Court in 2011. In Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74 the Federal Court held that health company, Allergy Pathway, was liable for postings of third parties in social media because it had control over its social media pages, knew that misleading testimonials had been posted on Facebook and Twitter, and took no steps to remove them.

The recent determination of ASB regarding Diageo’s Smirnoff Facebook page has extended the reach of the Federal Court decision by stating that provisions of the Advertiser Code of Ethics (the Code) apply to an advertiser’s Facebook page and to content generated by advertisers, as well as material or comments posted by users or friends. The ASB found that a Facebook page falls within the definition of advertising and marketing communications under the Code and is not merely a networking tool used by existing customers.

In a decision of the ASB on the same day as the Smirnoff decision, the ASB found that the VB Facebook page had breached various provisions of the Code. Again the ASB found that the Facebook page was a marketing communication tool and that the provisions of the Code applied to content created by VB as well as content posted by users or friends. Importantly, the ASB noted that the VB Facebook page user comments, identified in the complaint, were posted in reply to questions posted by VB.

The above decisions closed a perceived loophole, which allowed brands to benefit from social media without accepting responsibility for content posted by advertisers or customers on Facebook, which would have otherwise been inconsistent with the Code or a breach of the Competition and Consumer Act 2010 (Cth) (the Act). In particular, s18 of the Australian Consumer Law in Schedule 2 of the Act, prohibits misleading or deceptive conduct.

In an article published by the Canberra Times, the Australian Competition and Consumer Commission (ACCC) backed the determination of the ASB. The competition watchdog sent a warning to large companies with a wealth of resources at their fingertips – if comments are not removed within 24-hours then the company will face potential court action.

If the ACCC’s past modus operandi is anything to go by, an ACCC prosecution of a large company who has not obeyed the ACCC stated view will usually follow.

While the ASB has so far refused to issue specific guidelines on social media policy, here at von Muenster we expect that the ACCC will release industry guidelines in the near future.

What does all this mean for agencies and their clients?

Community managers will now have to be vigilant in monitoring their social networking pages to ensure that all content posted by any person is not in breach of the Code or in contravention of the Act. It will on a case by case basis be necessary to moderate, respond to or even remove content posted by a brand’s Facebook page users. Community managers should also undertake training on the requirements of the Code and the Act to ensure they are able to identify posts by third parties which may be problematic. This training should not just be linked to infringements under the Code or Act but also other applicable laws, including defamation, copyright, trademarks, causing offence and racial discrimination.

It is difficult to provide a precise formula or guide as to what content or posts should be left, moderated or removed. Different rules apply under the self-regulatory Code and applicable laws, such as the Australian Consumer Law which forms part of the Act. Each situation turns on its own facts and circumstances, and often one will have to consider numerous factors, including the nature of the Facebook page and the advertiser; the nature of the products; the audience that is engaging with the Facebook page; the effect of other related marketing communications; and the overall context. It will be important to seek legal advice on a case by case basis if unsure.

At the end of the day, a commonsense approach will need to be taken. If a post or content is suspicious, offends, is blatantly wrong or could cause a is representation to other Facebook page users, then you need to ask the question: ‘do I moderate, remove or leave the post’? The Code and other applicable industry codes (for example the ABAC alcohol code) are quite straightforward and should readily be able to be applied to what is being posted on Facebook pages.

Section 18 of the Australian Consumer Law is a little more complicated. As stated above this section prevents misleading or deceptive advertising claims and is designed to protect consumers. It applies to Facebook and other social media sites, including posts by users (see Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd discussed above). Not all posts that are incorrect or inflated will be misleading. The posts need to be considered against the Facebook page as a whole – the other posts, posts by the advertiser and the context. The audience of the Facebook page needs to be considered and then the message that is being conveyed to that audience needs to be ascertained – if the message is misleading or constitutes a misrepresentation to a reasonable member of the audience of the Facebook page, then it is possible there will be a breach of Section 18.

Personal opinions, puffery – ‘hey this is the best drink in the whole world’ – and other forms of social banter are unlikely to lead others into an erroneous assumption about the brands products. It is where the brand puts out a misleading message or allows a misleading message to develop, and the responding posts reinforce or amplify this message, where we see possible breaches occurring. The possible spectrum of situations are endless and again, each Facebook page and situation will need to be assessed on its own merits.

If an organisation is active in social media and is engaging on a frequent basis, then for larger organisations with greater resources, it is likely that the response time to moderate or remove offending content may be as little as 24-hours, however this is by no means law at this time and awaits a judicial pronouncement.

Please get in touch if we can be of any further assistance in helping you and your clients navigate the implications of these decisions.

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