The benefits of social media to promote small businesses are both well known and well utilised. Free-to-use social media platforms such as Facebook, YouTube, Twitter and Instagram have revolutionised the way brands market their products in allowing businesses to spread their messages extremely quickly, to huge numbers and at very little cost.
However, the main benefit of social media as a marketing tool—the rapid and widespread sharing of information—is also a source of great risk for businesses. Comments and photographs shared online by disgruntled customers can cause significant damages to a brand’s hard-earned reputation. Brands also run the risk of their marketing strategies being ‘hijacked’ by social media users to the detriment of the brand.
One famous example of this is that of Qantas, whose social media team launched the hash-tag #QantasLuxury in 2011, encouraging people to describe their “dream luxury inflight experience” for a chance to win one of 50 luxury amenity kits. However, Qantas’s recent internal industrial disputes had caused grounding of their fleet, and irritated customers flooded the hash-tag with sarcastic comments, such as:
“I think #QantasLuxury is flying in a plane where every nut and bolt has been checked and double checked by someone is Australia who cares” – @thomasrdotorg;
“Flights that leave on schedule because Management doesn’t arbitrarily shut down the airline #QantasLuxury” – @stephendann.
But social media can present more than just risks to a business’s reputation; it can also create legal risks. While currently there are no laws specifcally governing social media use, it’s use could bring about legal issues including defamation, copyright infringement, and consumer law breaches, among others.
Defamation is a civil legal action concerning the publication of material damaging to a reputation, covering many kinds of publications, including social media content. An individual may be liable for publishing content without a defence that a reasonable person would consider to be defamatory. Defences include honest opinion, truth and triviality.
Both individuals and companies can be sued for defamation, and employers can be held vicariously liable for the defamatory actions of employees who have published content online. It is important to note that companies with more than 10 employees may not sue for defamation, but can be sued for defamation.
Australian copyright law covers a wide variety of works, including photographs and literary works.1 Copyright infringement occurs where an original work is reproduced or publicly communicated without permission of the owner. On social media, organisations may be liable for copyright infringement by “reposting” images and works without permission of the original owner.
In 2013, the High Court of Australia found that social media advertising and marketing is subject to the same consumer laws and advertising standards as their conventional counterparts2. The most important laws for social media marketers is the Australian Consumer Law, which prohibits individuals in trade and commerce from engaging in “misleading and deceptive conduct”.3 This provision covers statements and claims about products and services that are likely to mislead, including those made on social media.
Although many companies already have social media policies in place to minimise legal risks, social media adds a new dimension to the law by creating liability for comments published by consumers. For example, a customer of a chain restaurant could leave comments on the restaurant’s social media page praising the organisation’s use of ‘free range’ meat. If the organisation did not, in fact, use ‘free range’ meat, they could be found liable for misleading conduct if they do not remove the comment or respond with clarification. There is currently no clear timeframe in which an organisation is expected to remove such comments; therefore it is better to respond as quickly as possible.
Minimising Legal Risks
The number of advertised jobs for social media marketers has increased dramatically over the past few years, and now even small businesses have dedicated social media employees. Therefore, in order to minimise legal risks, it is important that these employees are aware of the law regarding social media marketing. For smaller businesses, it may not be feasible to hire staff dedicated to updating and monitoring social media platforms. For these businesses, instituting a daily social media routine may prove beneficial.
In either case, establishing a social media policy among staff is crucial in protecting a business from liability. There are huge benefits for businesses that make good use of social media, but being aware of the laws of defamation and copyright, and the consumer laws, as well as rigorous monitoring of online content—including comments made by customers—is essential for good business management.
1 Copyright Act 1968 (Cth).
2 Google Inc v Australian Competition and Consumer Commissioner  HCA 1.
3 Australian Consumer Law s 18(1), found within the Competition and Consumer Act 2010 (Cth).