The use of social media platforms by businesses to promote themselves and their products has created an environment ripe for a phenomenon known as "astroturfing". "Astroturfing" typically refers to people creating an artificial groundswell of support or endorsement at a grassroots level. Some forms of astroturfing have existed for years - chefs have been writing favourable online reviews of their own restaurants and hotel owners have been posing as travellers and discrediting competitors on travel websites. The problem is so prevalent that wary users have learnt to take these reviews with a grain of salt.
The emergence of social media sites such as Facebook has allowed astroturfing on a larger scale and using more sophisticated and subtle methods. For example, organisations are being engaged to provide "likes" on a business' Facebook page for a fee. These "likes" are provided via fictitious profiles created by a software programme or "bot" or from real people who are incentivised to "like" a certain Facebook page.
The legality of this kind of astroturfing does not appear to have been examined by the New Zealand courts. However, section 13(e) of the Fair Trading Act (FTA) prohibits making false or misleading representations that goods or services have an approval or endorsement. This appears to cover situations where a business pays an organisation to provide "likes" on the basis that, in the online context, a "like" is an indication of a person's approval and arguably, a business that has paid for the "likes" displayed on its Facebook is representing that it has a level of approval or endorsement that it does not actually have.
The Australian Competition and Consumer Commission (ACCC) has indicated that it includes representations made via social media under its definition of conduct that could mislead consumers. Last year the ACCC successfully brought an action against Allergy Pathway Pty Ltd for misleading statements posted by third parties on Allergy Pathway's Facebook wall.
In summary, the signs appear to be saying "keep off the astroturf". Not only should businesses think twice before buying Facebook "likes" from a legal perspective, but from a reputational perspective, astroturfing might not be worth the risk. If the artificial nature of an astroturfing business' support was discovered, the business' reputation would suffer considerable damage.