In brief

A recent Advertising Standards Bureau ruling in response to a complaint submitted by two Queensland academics to ‘test the system’ will force businesses who maintain a social media presence to devote attention to ensuring all content adheres to advertising codes of practice. All content on a Facebook page operated by a brand including both content posted by the brand as well as user comments will now be considered advertising and will be subject to such codes. Bringing both brand and user content into the ambit of the advertising codes presents new challenges for brands and their social media strategies. Businesses will be forced to divert resources to stringently monitor their online presence or will adopt a conservative approach limiting the interactivity of their strategy.

Key takeaways

  • Facebook (and other social media) pages are now considered advertising,
  • advertising codes of practice will apply to all such communications,
  • brands are now liable for their own content as well as user comments, with potential penalties for misleading or inappropriate public posts on their sites, and
  • the onus is now on the brand operating the site to remove such comments within a ‘reasonable time’.

The complaint

The complaint was made to the industry watchdog, the Advertising Standards Bureau (ASB) against Diageo Australia Ltd (the owner of the Smirnoff brand in Australia) and Fosters Australia, Asia & Pacific (the owner of the VB brand (VB)). It has emerged since the ASB ruling that the complaint was submitted by Nicholas Carah of Queensland University and Sven Brodmerkel of Bond University for the purposes of researching brand and consumer interaction on social media.1

Their complaint alleged that material displayed on the Smirnoff and VB Facebook pages had breached the Australian Association of National Advertisers Code of Ethics (AANA Code) and the Alcohol Beverages Advertising Code (ABAC Code). The disputed material included posts originating directly from the brands themselves as well as posts made by users on the fan page. The complaint referred to the case of Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd in which the Federal Court considered a brand’s liability for misleading comments permitted to remain on its Facebook page.2

The AANA Code is the centrepiece of the self-regulation scheme adopted by the Australian Association of National Advertisers. Its object is to ensure that advertisements and other forms of marketing communications are ‘legal, decent, honest and truthful and that they have been prepared with a sense of obligation to the consumer and society and a sense of fairness and responsibility to competitors’.3 Alcohol advertising in Australia is similarly self-regulated, with the ABAC code having been negotiated with government.4

The ASB decisions

In considering whether the material posted by ‘fans’ onto the Facebook page breached either of the relevant codes, the ASB considered the definition of advertising or marketing communications.

Under the AANA Code, advertising and/or marketing communication is defined as:

‘any material which is published or broadcast using any Medium or any activity which is undertaken by, or on behalf of an advertiser or marketer, and over which the advertiser or marketer has a reasonable degree of control, and that draws the attention of the public in a manner calculated to promote or oppose directly or indirectly a product, service, person, organisation or line of conduct.’5

The ASB was of the view that a brand’s Facebook page broadly meets the definition of advertising/marketing communication and thus the AANA Code applied to its content. As the entirety of a brand’s Facebook page can be used to engage with customers, the Board further considered that the AANA Code applies not only to the content generated by the page creator but also to material or comments posted by users. In the case of the complaint against VB, comments forming the subject of the complaint were posted in reply to questions posed by VB asking users to comment on how to make a great Australia Day barbecue.

The ASB determined that VB’s Facebook page had breached a number of sections of the AANA Code. User content was allowed to remain on the Facebook page, despite containing obscene language as well as being sexist, racist and homophobic.6 By contrast, it was determined that the Smirnoff Facebook page did not breach the AANA Code.7

Ambiguity and incongruity

As the case reports made no reference to Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd, it is unclear whether the ASB attributed any weight to the case in making its ruling.8 Regardless, the Allergy Pathway decision is of interest as it is indicative of the attitude of the judiciary towards ‘passive’ publication through social media. In that case, the respondent was the subject of previous undertakings given to the court in response to misleading and deceptive conduct regarding its business of diagnosing and treating allergies. The Federal Court found the respondent liable for allowing testimonials (which would have amounted to contempt of court had the respondent published them) by customers to remain on their Facebook page. It was held that the respondent became the publisher of the user content as they knew of the testimonials and decided not to remove them. Finkelstein J examined the long line of authorities of defamation ‘bulletin board’ cases, in order to put the internet cases in their proper historical context.

The words of Greer LJ some 67 years before the launch of the Facebook wall in relation to a noticeboard posted on the wall of a golf club are certainly timeless:

‘To rest upon their wall and not to remove it, with the knowledge that they must have had that by not removing it would be read by people to whom it would convey such meaning as it had, were taking part in the publication of it’.9

The ASB considered that social media requires monitoring to ensure that offensive material is removed within a ‘reasonable timeframe’. However, no guidance was given on what period of time to remove infringing comments might be considered acceptable. The Australian Competition and Consumer Commission (ACCC) has since supported the ASB rulings, noting that a single day might be a reasonable time period for a large well-resourced company to ensure that inappropriate or misleading comments are removed.10

Factors that a court might consider in determining a reasonable removal time for a smaller business would accordingly include the size of the business, the quantum of their investment in a social media strategy and the nature of the infringing comments. Larger businesses with an established online presence will likely implement rigorous and potentially burdensome regimes to ensure that no content remains that is offensive, misleading or potentially breaches any relevant advertising codes. In response to the ASB ruling, Fosters has reportedly since introduced rules that include twice-daily monitoring of user comments.11

Social media: fringe medium to the regulated mainstream

The sun appears to have set on the days of social media as an unrestricted ‘direct’ communication medium allowing brands to fly beneath the regulation radar. As uptake on sites such as Facebook and Twitter increases, customer reach has begun to rival or even surpass commonplace mediums such as broadcast television or print media. It is hardly surprising that the industry watchdog has brought these mediums within the ambit of advertising industry codes. With businesses now required to turn their attention to moderating material posted by others as well as an overarching obligation to adhere to advertising codes, risk reduction strategies will begin to take shape. In order to minimise risk, brands might implement strict front and back end social media policies that include monitoring guidelines and appropriate user behaviour, or alternatively, may prefer to remove the user content functionality from their social media offering.