February 5, 2013

When is a Facebook Post Misleading or Deceptive Conduct?

A recent decision by the Federal Court highlights the caution that businesses should exercise before making pronouncements on social media.

In Seafolly Pty Ltd v Madden, a legal battle ensued between two swimwear labels.  Madden (the designer of Whites Sands swimwear), noticed similarities between her swimwear designs, which Seafolly had had access to, and those released by Seafolly later that season.

Ms Madden posted messages on Facebook that stated both implicitly and explicitly that Seafolly had copied her collection, and then emailed the Facebook page to a number of media organisations. Some of these organisations published articles such as, “White Sands swimwear Calls Seafolly Plagiarists”.

The court ruled that Madden’s posts on Facebook were misleading or deceptive conduct.  Of Madden’s conduct, Justice Tracey wrote:

Before posting her views she failed to take a number of steps which would have elicited facts inconsistent with the notion that any copying of her garments had occurred.  She could, for example, have made enquiries of retailers to establish when the Seafolly garments were placed on the market.  She could have attended a retail outlet and examined some, at least, of the Seafolly garments.

Facebook posts can be problematic because, while they feel personal, they are really a public media release of sorts.  Businesses should regard social media as a formal communications channel, even if the format of the communications is informal.

TAKEAWAY:

  • Facebook posts on a personal page about a corporate competitor may still be considered comments made ‘in trade or commerce’ under the Competition and Consumer Act 2010.
  • Comments made in a public forum like Facebook can have the same legal effect as a statement made in a press release.
  • The defence of a ‘mere expression of opinion’ to an allegation of misleading or deceptive conduct cannot be relied upon where the opinion was not ‘honestly held’, which includes when the person expressing it was recklessly indifferent as to the truth.

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