Understanding your responsibilities for online comments

Jamie White.Solicitor Director.Pod Legal.Hi_Res (1)As retailers and business people, most of us have come to embrace the internet and social media over the past decade. It has become a cornerstone for innovation in marketing and the most rapidly growing marketplace for retail consumption. Today, it is safe to assume that most retail businesses worth their salt have an online presence via a web, Facebook, Twitter or Instagram page.

But did you know that you are legally responsible not just for content that you post online, but also for comments, contributions and posts made to your pages by others? In some circumstances, an unmonitored or poorly maintained comments field or ‘wall’ can be the difference between an effective marketing campaign and liability that results in financial and reputational damage.

Picture this: you have recently launched a new, revolutionary product, for which customers will be lining up for days. You devote an entire page of your website to this product, including a comments field, in case any new customers wish to pass on some positive feedback. Good idea right?

Yes, this is an effective means of marketing in certain industries, but it comes with strings attached.

Below I’ve canvassed some of the ways that your web presence can attract liability merely by failing to take down certain comments made by third parties on your pages. I also briefly cover how you can avoid liability.

Legal liability
The three ways that liability can arise from the above scenario are:

  • Liability for misleading and deceptive conduct;
  • Contravention of Advertising Standards; and
  • Liability for defamation.

Misleading and Deceptive Conduct
Under the Australian Consumer Law (ACL), businesses must not engage in conduct that is misleading and deceptive or likely to mislead and deceive consumers. How does this relate to our example? Well, the Federal Court examined this question in the 2011 case of ACCC v Allergy Pathway (No 2) [2011] FCA 74.

The case concerned a business called Allergy Pathway, which claimed to treat allergies using a particular technique called the ‘muscle strength indicator technique’. In fact, this technique did not work in the way that it claimed. Therefore, the marketing of the technique by Allergy Pathway was misleading and deceptive conduct under the ACL.

The interesting question considered by the case was whether Allergy Pathway could be found liable for testimonials made by clients on the Allergy Pathway Facebook wall. The Federal Court found that Allergy Pathway was a publisher of the comments and therefore was liable for these posts.

This means that, as the law stands, if your business maintains a Facebook page, or another form of online page, and third parties post comments to your page, which contravene the ACL, you will be liable as a publisher of this material. The repercussions of contravening the ACL are extensive, and include paying damages and pecuniary penalties.

Advertising Standards
The Australian Association of National Advertisers Code of Ethics (the Code) regulates the content of anything that is regarded as an advertising or marketing communication. Importantly, under the Code advertisers must not publish offensive or discriminatory material.

Recently, the Advertising Standards Bureau reinforced the Allergy Pathway decision, but in the context of Advertising Standards. It found that businesses are responsible for third-party comments posted on their social media pages over which they have control, and will be held responsible for any third party comments which breach the Code.

In a similar way to your liability under the ACL or Advertising Standards, you will also be held responsible for defamatory comments made by third parties on a page controlled by you or your business. In its simplest form, a defamatory comment is a comment that unfairly attributes the reputation of another.

Imagine that you have created a web page in the way described above in order to promote your revolutionary product (also as described above). A fiercely loyal customer of yours decides to post a comment, complimenting your product. However, this zealous customer goes a step too far when they claim that a product sold by your competitor, a sole trader, causes cancer.

Surely you are not responsible for such a comment, right? Think again.

This type of comment can cause severe damage to the reputation of the competitor in this example and is taken very seriously in Australian law. Therefore, in defamation, any person who voluntarily disseminates, repeats, or omits to take down content when they have the power to do so, is responsible as a publisher of that material.

So, if a person posts a defamatory comment defaming another on your page, you will be responsible for that post and any consequences which may follow. Importantly, only a person or a company with fewer than ten employees can be defamed. A company that does not fall into this category will be required to take action under the common law tort of injurious falsehood.

What you can do to avoid liability?
Avoiding liability for third party posts on your Internet pages is relatively simple. All you need to do is monitor your pages, and take down any content, which you believe may be misleading and deceptive, offensive or defamatory.

How should you know which comments contravene Australian law? Give it the sniff test. If it seems that a person has overreached in a particular comment, they probably have. If you are still unsure, it is worth instructing a lawyer to assess the comment.

Further, it will be helpful to impose a ban on the posting of misleading, deceptive, offensive or defamatory material on your online pages. This is usually achieved via specific wording contained in a website’s Terms of Use document or a similar document hosted on a social media page.

So are your online pages exposing you to legal and reputational risk?

Jamie White is owner of Pod Legal, an award-winning law firm practicing in the areas of intellectual property, technology and social media law.

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  1. Brett Stevenson posted on October 26, 2015

    Jamie, Do you think this might scare off legitimate comments on businesses merely because the threat of legal action is beyond them financially to defend? Do you think legal firms will scare off legitimate criticism and comment through this sort of advice? reply

    • Jamie White posted on October 26, 2015

      Desley, I totally agree with you in that we all need to take calculated risks. We all do it in the day-to-day operation of our businesses. However, to do it effectively, we must be aware of what risks exist and what the potential benefits of taking those risks may be. Education, knowledge, experience and awareness are all key to helping us make good decisions and not taking on unnecessary risk. reply

  2. Jamie White posted on October 26, 2015

    Brett, so long as people are fair and factual in their comments, they should not be put off commenting for the fear of legal action. In my view, it is really important for articles and information on these types of topics to be distributed. It allows business owners and others to become more aware of the rules that apply before engaging in certain conduct. Then they can assess the risk and either make a comment, or not. reply

  3. Brett Stevenson posted on October 26, 2015

    It sounds good in theory Jamie (and good to get your response by the way) but the difficulty comes when a legal firm challenges anyone by saying "that is not fair and/or factual". It well may be fair and factual but who is going to stand up against a large legal firm eh? One would like to think organisations such as ASIC etc would do so without being easily intimidated but I think it 'fair and factual' to say that ASIC really have been a poorly performing body over the last decade in this regard. All too often the bodies that should be supporting 'fair and factual' comments in the marketplace are very gun shy when push comes to shove, especially if the people involved are small businesses/franchisees etc who have little real power, and large legal firms are on the other side. I'm all for free speech on corporate and business misbehaviour especially when small businesses are the ones losing out. reply

  4. Aalka posted on September 6, 2017

    Thanks for sharing this useful content. reply

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