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Businesses are increasingly reliant on social media as an advertising channel, a way to connect with customers, and a means to gain valuable market insights.

The reputational risks of social media are one aspect, with a few social media campaign ‘fails’ causing uproar over the years.

Yet there are legal risks too.

Though the legal risks are not necessarily unique to an online platform, when considering how quickly and easily social media can ‘go viral’, it is important that businesses put in place both preventative and reactive ways of mitigating these risks.

The terms and conditions of the social media platform are one aspect that needs to be explored. Material which is not compliant may be removed by the social media networks and companies are exposed to potential legal liability to the social media network.

In this article, though, we explore five potential legal risks external to the platform that can occur where a business uses social media, including copyright infringement, misleading conduct, privacy & confidentiality, defamation and non-compliance with advertising standards.
1. Copyright infringement

Businesses may be led into thinking that because a photograph, for example, is made available on the internet or is subject to a creative commons licence only, it is free for them to use, no further questions asked.

Rarely is this the case.

Whilst exceptions to copyright law and within a licence may make material available for certain uses, including for personal use, usually these restrictions will not apply for commercial use, including where used in an advertising or branding campaign.

Also, if the business is using music on its social media platforms, always consider whether a music licence is required and has been obtained.

Clearances for all third party materials should be obtained where used as part of a social media campaign, just as they would be for a print campaign.

Be somewhat sceptical of anything claimed to be ‘free’, and consider having the licence terms reviewed for conditions around attribution or restrictions on commercial use.

Businesses should also consider whether the talent featured in any photographs or videos, for example, have provided the required clearance. This would also apply to posting photographs or videos of customers or participants at an event run by your business.
2. Misleading Conduct

An offer made via social media still needs to go through all the usual checks.

Consumer protection laws which prohibit businesses from making false, misleading and deceptive claims about their products or services are still applicable. Claims made on social media should be substantiated, as should any comparisons with competitors.

If the offer is for a limited time, or conditions apply, the phrasing of the offer should be considered. Reviews or testimonials should be not falsified or otherwise misleading. The Australian Competition and Consumer Commission (ACCC) expects companies to regularly monitor their social media pages, including for content posted by users that the business knows or should know is misleading. The ACCC can require companies to substantiate claims and can take court action or issue an infringement notice where it identifies a breach of the law.

Be careful when conducting campaigns that may imply an affiliation with or endorsement by (for example) a celebrity, a movie or a government body. If a business does not have such an affiliation or endorsement, this content could be considered misleading and the third party could take issue.

Conversely, where a business is paying or otherwise sponsoring a celebrity or organisation to endorse its products or act as a brand ambassador using the third party’s social media channels, it may be misleading for the third party to post the paid social media content without somehow disclosing the affiliation.

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