Social media: Loose tweets sink fleets

Businesses need to be aware of the potential legal risks when using social media to engage with their customers.

Social media is a cutting edge way for businesses to engage with their customers – but it comes with a certain amount of legal risk. The core concept that businesses must come to terms with is that social media is no different in the eyes of the law than any other communications channel.

The easiest trap to fall into is a breach of the misleading and deceptive conduct laws. It is much easier to make comments that will invite trouble on social media channels because many businesses don’t have the same structures and review processes in place that they do for more formal or traditional advertising. The courts have found that consumers will place weight and rely on a business’s official Twitter account or Facebook page. Businesses should therefore have a well-drafted social media policy and train their staff in how different social media platforms work.

Businesses should also ensure they have processes that identify and allow for changes to misleading, deceptive or defamatory statements before they are posted. These procedures need to be quick and efficient because of the immediacy of social media.

Be prepared to monitor and moderate different platforms to ensure that third party comments which could offend or breach legal obligations are deleted or amended. For example, the Advertising Standards Board has deemed official Facebook pages and other official social media accounts to be advertising. This means such pages need to comply with certain codes and community standards, the same as if they were on TV, radio or other traditional advertising medium – including comments made by ‘fans’.

For businesses listed on the ASX, new Listing Rules suggest that certain companies should have processes to monitor social media channels for information the market is trading on and be ready to respond to any speculation. This could include discussions and rumours that can lead to a false market, particularly in the lead-up to a market announcement or when a market-sensitive announcement is being released.