Surfing the Social Media Wave

Article  \  13 Nov 2012

More and more people are jumping on the social media platform and using Facebook®, Twitter®, YouTube® and Linked-In® to promote themselves, their goods and services. A recent case determined by the Advertising Standards Authority (ASA) has however highlighted the dangers potentially associated with such campaigns.


The case involved Hell Pizza® and in particular its “Facebook Confessional” competition where users were invited to make comments on the company’s wall on Facebook.  Hell Pizza is well known for being a company that likes to court controversy in its marketing campaigns.  Its Easter billboard campaign, featuring a bun decorated with an inverted pentacle symbol and the words: “For a limited time. A bit like Jesus” garnered the most complaints to the ASA in 2011.  Hell Pizza’s 2006 “Lust Pizza” random mail out is the most controversial advertisement in ASA history attracting record 685 complaints after condoms were sent to random letterboxes.

Unsurprisingly, given the company’s predilection to shock, some comments posted on the Facebook Confessional page “pushed the boundaries” resulting in a number of complaints being lodged with the ASA. The case was settled prior to a decision being issued and the Confessional page as removed.

Earlier this year the Australian Advertising Standards Board found that the Smirnoff Facebook page was a “marketing communication tool” and, therefore, subject to advertising regulation.  In addition, the Board stated that the Australian Code applies to content generated by advertisers as well as material or comments posted by users or friends.  Click here for a link to the decision.

The ASA Guidelines

In light of the Australian decision and in order to clarify its own position on social media, the ASA has provided guidance to assist parties to determine what constitutes an “advertisement” on social media.  The guidance note also provides some clarity on when material added by others (“user-generated content”) on social media is considered “advertising” and, therefore, comes under the auspices of the ASA and its Codes of Practice.  

An advertisement is defined broadly to be “[A]ny form of advertising…which promotes the interest of any person, product or service, imparts information, educates, or advocates an idea, belief, political viewpoint of opportunity”.

The ASA considers that it has the right to look into any matter where the advertiser has a ‘reasonable degree of control’ over the social media platform in use and where it is promoting a brand or service to the public.  Taking this to its extreme, a wide variety of promotional or opinion based postings on social media platforms will be captured, including re-posting of any such material.

If, therefore, any material posted on your platform is misleading, deceptive or offensive, your organisation could be called to account by the ASA or, if the content is accessible to Australian users, the Board.

The ‘stronger’ arm of the courts

The ASA and the Board can only recommend that advertising material that is in breach of their respective Codes be removed.  They have no power to enforce that recommendation.  Potentially more serious sanctions can and most likely will be imposed by the New Zealand and Australian courts for misleading or offensive advertising by way of social media platforms.  These include injunctions, awards of damages and fines.

For example, in 2009 the Australian Competition and Consumer Commission (ACCC), investigated a company called Allergy Pathway and contended that the company’s diagnoses and treatments were, putting it kindly, ineffective.  The Federal Court of Australia agreed and ordered Allergy Pathway to cease publishing the relevant representations, to publish corrective advertising, and to carry out a detailed compliance programme.

In 2011, the ACCC brought a further action against Allergy Pathway, this time contending that Allergy Pathway should be held accountable for misleading statements made by others on its Facebook page and Twitter account.  The Court agreed.  Allergy Pathways was, therefore, held to account on the basis that it was aware of the user generated content, accepted general responsibility for that content and failed to remove it.  Allergy Pathways received fines for contempt and further orders requiring corrective conduct.  You can view the decision here.

While this case is Australian and based on contempt of court, you could face the same type of complaint and similar sanctions under the New Zealand Fair Trading Act 1986.  It also has important implications in relation to breaches of enforceable undertakings under the amendments to the FTA proposed in clause 26 of the Consumer Law Reform Bill.

What can you do to ensure you don’t fall foul of the ASA or FTA?

  • Do you have a social media policy?  While you are responsible for you own content, you may also be responsible for the content of others.  Compliance with the policy should be monitored and you should regularly review social media sites to ensure that any misleading, offensive or harmful material is removed;  
  • Have you got a disclaimer on your platform? If not you should also consider inserting the following as recommended by the ASA here;
  • Are you paying a third party to use a Twitter account to endorse or promote an organisation or its products and services? if so, ensure the third party uses the #ad hashtag.

We can help you draft a suitable compliance policy, review directories for inappropriate postings and review intended advertising to ensure compliance with the Codes of Practice. 

Should you need expert guidance please contact either Penny Catley or Deborah Kessell-Haak.