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Media, Entertainment & IP News Alert: User Generated Content in Digital Advertising

News Alert 05 August 2013

The regulatory requirements for the monitoring of user generated content (UGC) when using social media in advertising, are currently unclear.

A recent decision of the Federal Court [1] and of the Advertising Standards Board (ASB) [2] suggest that a brand owner can be held responsible for UGC if such content does not comply with applicable advertising codes [3] and the Australian Consumer Law (ACL). A brand owner may be held liable if the owner is aware of offensive content and has not taken any action to remove it. In other words, the brand owner may be held liable not only for material it publishes but also for material published by third parties on social media platforms. These decisions place a heavy onus on brand owners to monitor and moderate their social media content for compliance with the ACL and the advertising codes.

The ACCC, in its capacity as regulator of the ACL and industry bodies such as the Australian Association of National Advertisers (AANA) and the Interactive Advertising Bureau (IAB), have released guidelines to assist brand owners to understand what content should be monitored and how often monitoring should take place. In line with the ASB determinations, the AANA and the ACCC adopt a strict approach and recommend that brands should monitor at least once every business day and for 2 hours immediately following a post by the brand (the timeframe may vary depending on the size of the company). The IAB adopts a more flexible approach. It does not agree that UGC should be considered ‘advertising’ under the advertising codes but it still recommends that brand owners monitor and moderate the use of UGC on their platform (to the extent resources allow and/or at the same time as posting a new comment).

Irrespective of the level of monitoring a brand adopts and in order to minimize exposure to legal risks, brand owners should develop ‘terms of use’ and social media policies to outline user’s rights and obligations on social media platforms (i.e. which type of material is prohibited and how it will be removed).

Please contact TressCox Lawyers if you have any questions or if you require any assistance.

[1] Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2) [2011] FCA 74
[2] Case Number 0272/12, Diageo Australia Limited, 11/07/12,  Case Number 0271/12, Fosters Australia, Asia & Pacific, 11/07/12
[3] The AANA Code of Ethics applies to advertising and marketing communications from 1 January 2012. Other codes include the AANA Code for Marketing & Advertising Communications to Children, the AANA Food & Beverage: Advertising & Marketing Communications Code, the Environmental Claims in Advertising and Marketing Code and the Motor Vehicle Code.


Jennifer Huby, Partner
Sydney

Matt Duffy, Special Counsel
Sydney

News Alert 05 August 2013
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