A recent decision of the Federal Court provides a warning for companies that use social media networks such as Facebook and Twitter to promote their businesses. In ACCC v Allergy Pathway, Finkelstein J found that Allergy Pathway was liable for misleading and deceptive statements which had been posted on its website, and its Facebook and Twitter pages, by its customers.
In 2009, Allergy Pathway had provided an undertaking to the Federal Court that it would not "make or publish or cause to be made or published in any internet website", certain misleading statements. These prohibited statements included representations that Allergy Pathway could cure or eliminate, or successfully treat, any allergies or any allergic reactions, and that after its treatment it was safe for that person to have contact with the allergen to which the person had an allergic reaction. The comments which had been posted by clients of Allergy Pathway on its Facebook Fan page and Twitter page were controversial as they included prohibited statements. Allergy Pathway argued that the comments were made by its customers and therefore not statements by it. However, as the ACCC contended and Finkelstein J accepted, while Allergy Pathway was not responsible for the initial publication of the testimonials, it "accepted responsibility for the publications when it knew of the publications and decided not to remove them". Finkelstein J found that Allergy Pathway had caused the statements to continue to be published from the time it became aware of their existence, and concluded that this was enough to put the company in breach of its undertaking.
What does this decision mean? It means that businesses that use social media networks for promotional purposes must regularly monitor, review and update all their social media outlets to ensure that statements which could potentially be misleading and deceptive (or are otherwise actionable) are removed. If a business is aware of misleading statements on its social network pages or its websites, inaction is likely to result in liability because it could be found to have caused the continued publication of these statements. Having a regular monitoring and editing mechanism in place will help limite the potential liability that these social media outlets can create.
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