Social networking sites - ACCC v Advanced Allergy Elimination

Social networking sites like Facebook have become part of most people's lives. These sites have completely revolutionised the ways in which we can communicate with each other and the means through which businesses can market their products and services.

Facebook's website states: 'Facebook helps you connect and share with the people in your life' and 'fan' pages can be created for 'Bands, Businesses, Restaurants, Brands and Celebrities… to connect with their fans and customers on Facebook.'.

However, a recent decision of the federal court may cause businesses to rethink their use of social networking sites; a business has been found liable for the misleading statements posted on its Facebook fan page by its clients. Businesses must be exceptionally vigilant if they are using or considering using social networking sites as a marketing strategy - as this case highlights, liability for the publication of a statement is not limited to the original author. 

ACCC v Advanced Allergy Elimination

In 2009, the Australian Competition and Consumer Commission (ACCC) issued proceedings against Advanced Allergy Elimination and its sole director, Mr Paul Keir, for contravening the Trade Practices Act 1974 (TPA) - in particular, for engaging in misleading and deceptive conduct by alleging that its treatment methods could identify, treat and cure allergies.

The federal court came to the conclusion that AAE's treatments could not cure allergies, and claiming that they could amounted to a contravention of the TPA. The court found that Mr Keir was also a party to AAE's offending conduct and was therefore also liable. The court made several orders, one being that AAE and Mr Keir would undertake to refrain from making any further representations relating to AAE's treatments.

In 2010, the ACCC issued proceedings against the then AAE (now called Allergy Pathway) and Mr Keir for contempt of court. The ACCC alleged that Allergy Pathway and Mr Keir breached the original order made by the federal court by publishing material on Allergy Pathway's website and on various social networking sites. The ACCC argued that the material was a repetition of the misleading and deceptive statements that constituted their original offending conduct. Allergy Pathway and Mr Keir admitted that some of their conduct was in breach of their undertakings.

The ACCC also put forward that Allergy Pathway and Mr Keir were liable for statements made by clients that were posted on the 'wall' of Allergy Pathway's Facebook 'fan' page. It was alleged that these statements were misleading and deceptive, and Allergy Pathway knew them to be as such and did not remove them. Allergy Pathway submitted that it could not be responsible for testimonials and statements made by third parties.

In order to determine whether Allergy Pathway and Mr Keir were in contempt of court, the court needed to consider the meaning of the word 'publish'. The issue of publication has been considered in numerous defamation matters. In this instance, the issue to be considered was whether a business can be found to be responsible and ultimately legally liable for comments and statements made by third parties, particularly if it is aware of the statements and does not remove them.

The court reviewed relevant case law in this area such as the principle in Thompson v Australian Capital Television Pty Ltd (1996), whereby it was stated that a 'journalist, printer, publisher and distributor are joint tortfeasors in respect of the ultimate publication of a libellous periodical or book'.

The court found that in order to be regarded as a publisher of a statement, one does not need to be the original author - and subsequently found in favour of the ACCC and held that Allergy Pathway was liable for the statements of its clients, because it:

1. was aware that clients had posted statements on the Allergy Pathway Facebook 'fan' page; and
2. made no effort to remove them.

Mr Keir was also found to be liable because he was aware that these statements had been posted on the Facebook 'fan' page.

Now what?

Although the main issue facing the federal court was whether Allergy Pathway and Mr Keir were in contempt of court, the decision has once again highlighted that publication of statements can affect more than just the author. 

The decision handed down by the federal court in ACCC v Allergy Pathway will undoubtedly cause a significant impact on businesses that utilise social networking sites or other like media to market their products and services. It must be understood that despite this recent case, businesses should not be afraid of using social networking sites. Facebook, Twitter and Youtube (to name a few) have become excellent marketing tools for business to place their brands into the world, for generally little or no cost.

Businesses should continue to utilise social networking sites, because they are a cost effective and efficient way to connect with clientele and promote products and services. However, as the recent federal court decision shows, it is necessary for businesses to be acutely aware of their responsibilities and of the legal implications that can now arise, should they not monitor these platforms diligently. 

Marketing through social networking sites such as Facebook can still continue without any difficulties; Facebook allows its users to delete any comments and photos posted by others if these are inappropriate. This was Allergy Pathway's failure - it was able to delete the statements made by its clients but failed to do so and was therefore found to be liable.

It is no surprise that legal implications and social networking sites now come hand in hand since we utilise them almost daily both socially and professionally - but we must take the good with the bad.