27 Sep 2012

Like this page: Businesses' liability for unlawful third party content on social media

by Chris McLeod, Sharon Segal

You could be liable for misleading or otherwise unlawful content posted by a third party on your social media site if you know about the content but choose not to remove it.

Two recent determinations of the Australian Advertising Standards Board have attracted significant media attention and some commentators have even described them as landmark rulings which will change the way brands use social media.

What do they really mean for brands on social media, and what (if anything) should you do to monitor your social media pages now?

Alcohol sellers' Facebook pages and the Advertising Standards Bureau

The two determinations were in response to a complaint made to the Advertising Standards Bureau (ASB) that user content posted on the VB Facebook page and the Smirnoff Facebook page breached the Australian Association of National Advertisers Code of Ethics, including because they were discriminatory (in the case of VB) and promoted excessive drinking.

In both cases the Board was required to determine whether user generated content is an "Advertising or Marketing Communication" regulated by the Code of Ethics. "Advertising or Marketing Communications" are defined in the Code of Ethics to be 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.

The Board decided that the Facebook site of an advertiser is a marketing communication tool over which the advertiser has a reasonable degree of control and which is designed to promote a product. Therefore, the provisions of the Code of Ethics apply to an advertiser's Facebook page and, as a Facebook page can be used to engage with customers, the Board further decided that the Code of Ethics applies to both content generated by the advertiser as well as user generated content on the Facebook page.

The complaint against VB was upheld (because the user generated content was found to breach various sections of the Code of Ethics), while the complaint against Smirnoff was dismissed (there were no breaches found).

In the determination in relation to VB, the Board noted that "social media is an advertising platform that requires monitoring to ensure that offensive material is removed within a reasonable timeframe" and that "content within a Facebook page, should, like all other advertisement and marketing communication, be assessed with the Code of Ethics in mind". The Board acknowledged the challenges in effectively monitoring social media to ensure that offensive material is removed within a reasonable time.

What is the consequence of the determinations?

The advertising industry in Australia is self-regulated under various codes. The Code of Ethics as well as other codes are administered by the ASB. The Board is an independent body which hears complaints made to the ASB about advertisements not complying with those advertising codes.

It is important to note that compliance with the advertising codes is voluntary and determinations by the Board are not legally binding. Failure to comply with the advertising codes, or even a Board decision, is not in itself a breach of the law and the ASB does not have power to enforce the Board's determinations –although non-compliance could give rise to negative PR.

Accordingly, these ASB determinations do not change the law and the conclusions reached by the Board may not be followed if similar issues come before a court. However, the determinations indicate that social media tools are considered to be advertising platforms for the purposes of the ASB's advertising codes and an organisation's social media content will be advertising to which the Code of Ethics and other relevant advertising codes apply, even if the content has not been posted by the organisation itself (provided the organisation has the technical ability to moderate such content). It does not matter if the organisation is not aware of the offending content.

The consequence is, for organisations that participate in the advertising self-regulation system administered by the ASB is that they now must monitor and moderate all content posted on their Facebook pages and other social media tools to ensure compliance with the advertising codes.

In our view, the media and some legal commentators seem to be giving too much weight to the ASB determinations. In addition to the determinations not being court rulings and relating to a voluntary code, it is also worth mentioning that the Board only reviews advertisements if a complaint is made about them.

In the VB and Smirnoff cases, the complainant was not a genuine consumer but, it has now emerged, two academics in Queensland who made the complaint for the purpose of investigating the interaction between brands and consumers in social media.

Responsibility for user generated content under Australian law: the Allergy Pathway

The position under Australian law regarding responsibility for content posted by third parties on an organisation's social media pages is not so clear-cut. In relation to misleading or deceptive content, the general position seems to be that you are not responsible for a third party's content unless you are regarded by the relevant section of the public as adopting or endorsing that content.

The best current court authority in this area is the 2011 case of ACCC v Allergy Pathway (No.2). This case concerned the publication of misleading statements by Allergy Pathway and its clients on the company's website and social media sites, including misleading testimonials written and posted by clients on Allergy Pathway’s Facebook page.

The issue before the court was whether Allergy Pathway could be said to have "published" the testimonials that the third parties posted (as that would be in breach of earlier undertakings to the Court that it would not publish misleading representations about the company's business). In the court's view, the third party testimonials could indeed be attributed to Allergy Pathway. Although Allergy Pathway was not responsible for the initial publication, it accepted responsibility for the publications when it knew of the publications and decided not to remove them.

Although this case focused on whether Allergy Pathway could be said to have published the testimonials, it seems to mean that an organisation may be found liable for misleading or otherwise unlawful content posted by a third party on its social media site if it knows about the content and chooses not to remove it, because it may then be regarded by users as having adopted the content.

Organisations should therefore ensure that they remove any misleading or otherwise unlawful content posted by third parties as soon as reasonably practicable after they become aware of it – otherwise they may be held responsible for that content.

The ACCC's position

ACCC Commissioner Sarah Court spoke to the media after the ASB determinations, warning businesses that they are responsible for making sure that the content on their social media pages is accurate.

While these comments appear to support our view that awareness is the key to assuming responsibility for third party content, they also take a step further by suggesting there is an obligation on businesses to actively monitor their social media pages.

Specifically, the ACCC appears to be suggesting that well-resourced companies should become aware of (and remove) misleading comments within 24 hours of publication, with more flexibility given to smaller businesses depending on when they actually become aware of the comments.

What will a court decide?

While the ACCC Commissioner's comments may indicate how the ACCC will approach matters in future, they do not necessarily represent what a court would find.

Clearly the more active an organisation is in monitoring its social media pages, the greater its exposure if any content is unlawful – because it will be taken to have itself adopted or published that content if it is aware of the content but does not remove it. In that sense, the law seems to encourage some form of moderation of third party content, but not so stringent moderation that all content will be seen as adopted or published by the moderator.

Whatever standard a court seeks to impose, we doubt any court would impose a set time limit to remove misleading comments. As always, it will depend on all the circumstances.

Unfortunately there is not enough legal precedent in this area to provide a black and white answer – this is an area of "wait and see".

Recommended strategy

Although this area of law is far from certain, the following is our recommended strategy.

From a legal (not compliance with ASB codes) point of view: 

  • unless and until further court decisions indicate otherwise, businesses are not required to moderate third party content constantly or before the content is posted (although we note the ACCC Commissioner's comments which indicate that the ACCC's view is that well-resourced companies should be monitoring their social media pages at least daily);
  • where a business becomes aware of misleading or otherwise unlawful third party content, it would be prudent to remove the content as soon as reasonably practical;
  • businesses should consider practical steps to limit the risk of offensive comments being posted. For example, we understand that Facebook has a feature that allows page administrators to block specific words – profane or otherwise – from appearing in comments on the page;
  • businesses should act promptly to review and potentially remove content if a complaint is received (in particular, the complaint will be evidence that the business is now aware of the relevant content); and
  • although constant moderation is not currently required, some form of reasonable monitoring/moderation would be prudent (again we note the ACCC Commissioner's comments above).

In any event, if any offensive posts by a third party are removed promptly after the issue is noticed, there is unlikely to be any significant legal sanction.

If a business participates in the ASB's advertising self-regulation system, then it seems it may need to do more regular monitoring and moderation (almost constant) in relation to any social media tools that it controls. If regular monitoring and moderation are not commercially feasible, businesses could wait and see if any complaints are received in relation to third party content. As stated above, the ASB process is only triggered by complaints from third parties.


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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.