The Australian Advertising Board recently ruled that Facebook is not just a communications platform, but it is also an advertising medium. Consequently, the communications put on corporate pages on Facebook must conform to advertising standards set forth by the Advertising Standards Board. This is a serious landmark development for Facebook in Australia, which could also echo through the many other jurisdictions that Facebook cater to.
Facebook allows individuals, companies and other organizations to build Facebook fan pages. These fan pages help organizations to brand themselves. Facebook positions these brand fan pages as surely a means for the organization to communicate with its consumers, with interested parties and with stake holders in the world in general. It is their face to the social networking community. There are many ways the Facebook fan page can foster communication and one of those ways is that it allows for people who like the fan page or members of the fan page to post comments. This is where the problem begins. According to the Advertising Standards Board in Australia, Facebook is not just a communications platform. It is not just an electronic bulletin board where the general public can post whatever comments. According to the ruling, it is an advertising medium, at least the Facebook fan page section. As such, whatever communications present there are deemed to be the communications of the company speaking for the company and speaking for the brand. If that is the case, it is covered by Consumer Protection Laws because the ruling deemed these comments to be ads or parts of ads.
The case began when the vodka company Smirnoff created a Facebook fan page and allowed users to post comments. A member of the public posted the comment on the page that made the claim that Smirnoff’s Vodka was the purest Russian vodka and buying Smirnoff would lead to better success with members of the opposite sex. According to the lawsuit filed against Smirnoff, Smirnoff failed when it did not remove that comment. The Advertising Board’s ruling basically made Smirnoff potentially liable on a number of issues. One, the claim that Smirnoff Vodka is Russian vodka is false because Smirnoff is an Australian company. Also the claim that it has the purest vodka may not fit in with the facts and that may be construed as misleading as well. Also the claim that drinking Smirnoff vodka might increase a person’s chances with women, on its face, violates basic advertising codes. This is a very powerful ruling because it communicates to the corporate entities who build these Facebook fan pages that they have to monitor the communications on their pages because they are interpreted by the regulatory body as statements of facts. Accordingly, these comments fall within consumer protection laws which strictly forbid fraudulent statements, misleading statements and other statements that harm the interest of the consumer.
The takeaway from this legal brouhaha in Australia over Smirnoff’s Facebook page is that corporations must hire companies, outsource or hire people to strictly monitor their Facebook pages to ensure that whatever representations the company directly made itself comply with standard regulations and, most importantly, comments made by the general public comply with consumer protection laws as well. We predict that the short-term result of this is that many corporate Facebook fan pages would be set to a no-comment status. This means general members or general public users will not be able to post comments. All materials will be strictly policed and approved by the corporate entity behind the Facebook page. The second upshot to this development is that it may not remain in Australia for long because there are many, many jurisdictions all over the world that have consumer protection laws that may want to follow Australia’s lead regarding Facebook page classification.
The third takeaway from this experience is that it may boost the use of outsource social media management companies. That is a good thing. There may be many social media management jobs generated and their key roles would be to monitor corporate communications and also to actively police fan pages where the corporate brand allows for public interaction. The main drawback with turning off public interaction is that many companies use Facebook fan pages to gain an insight window into how their actual users are interacting with the brand and by killing the comments functionality, a key part of consumer feedback is cut off. While there may be many brands tempted to turn off the user communications functions of their Facebook page, there are probably more that would just outsource the labor-intensive policing of social media content to third party companies. All told, this might actually prove to be a great milestone for Facebook because it has become even more credible and as you become more credible, there is great power involved in addition to great responsibility. Social media is a fact now and social advertising is a key component of that dynamic. This ruling is not surprising at all and is just part of the ongoing maturity of social media.