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Interview with James Varcoe, solicitor, sales & marketing law team.

In Australia, the Advertising Standards Board (ASB) has recently decided that it has jurisdiction over user generated content on Facebook.

The immediate effect of this decision is that businesses in Australia need to ensure that user generated content on their Facebook pages complies with advertising codes. Also, the Australian consumer watchdog, the ACCC, has warned that large companies should remove misleading comments from their Facebook pages within a day.

It all started when two Australian academics, who were investigating the interaction between brands and consumers in social media, submitted complaints about the official Smirnoff and VB Facebook pages. The academics complained that these pages contained "fan" generated material that was sexist and racist, promoted irresponsible drinking, and included obscene language.

Smirnoff argued that it was not appropriate to treat a Facebook page as advertising, as it is just a communication channel, like TV or radio, to engage with people. VB suggested that a requirement for pre-moderation of every user comment would be contrary to the spirit of social media and it is commercially unrealistic. VB also pointed out that unlike traditional advertising, "fans" choose to be in the clearly branded space by subscribing to a particular page. Further, there are additional safeguards in place as people who are registered on Facebook as being under 18 years old cannot see the content from the page and it does not appear in their news feeds. VB also argued that while many user comments mention VB beer, very few could be understood as "promoting" the product.

Despite these arguments, the ASB determined that a business's Facebook page is a marketing tool and within the ASB's jurisdiction if it is used "to draw the attention of a segment of the public to a product in a manner calculated to promote or oppose directly or indirectly that product". The ASB further decided that, as a Facebook page can be used to engage with customers, the advertising codes apply not only to the content generated by the advertiser, but also to materials or comments posted by Facebook users.

What does it mean for you?

If you have a social media presence in Australia, check that any user generated content complies with advertising codes. Many companies use external moderators to do this. If you have a social media presence in New Zealand, be careful with user generated content. While the Advertising Standards Authority in New Zealand has not had to decide if user generated content is within its jurisdiction, it will be interesting to see its position. As a starting point, consider implementing a social media policy to deal with user generated content.