For limited expenditure, you can reach a large number of people instantly, and studies have found that 71% of internet users are more likely to purchase from a brand that they are following on social media.
So what happens when someone posts something about your product or service that you don't agree with? Is it okay to respond?
The answer is yes, but as swimwear company, Seafolly and competitor, Madden, recently discovered, there are some important things to keep in mind in terms of your own liability.
Stick with the facts
Do your research before making comments about someone else on Facebook, or any other social media site. When in doubt, keep your response to a factual account and avoid describing what you think your competitor's state of mind was when they posted.
If you get it wrong, they can sue you (even though their comments about you were misleading and deceptive).
Let’s take an example. High end clothing boutique, Company A, asks a Chinese woman eating Chinese take away food, dripping with sauce, not to enter until she finishes eating and wipes her hands.
Competitor, Company X, only hears the words "no Chinese" and posts on its Facebook page: "Company A is being racist because it didn't let a Chinese woman into its shop!"
If Company A retaliates with: "Company X has no idea what it’s talking about and is just being malicious to injure us", you may well be liable for misleading and deceptive conduct. Why? If Company X genuinely believed that Company A was being racist, it would not be considered malicious.
It’s safer to simply state the facts: "Company X has misstated what occurred. We asked a lady of Chinese descent to finish her Chinese food before coming into our shop because it might have soiled some of our clothes."
Your “personal” comments
Another tricky one is your personal social media page. If any of your 'friends' or connections on your personal account are in your industry, statements you make about people or companies may be in trade or commerce.
This means that, liability can arise under the Australian Consumer Law for any misleading or deceptive statements that you or they make - even when that statement is “hidden” amongst other accurate statements.
Finally, remember that once a statement is made on social media, it can spread, quickly! Usually, the more people exposed to a misleading or deceptive statement, the higher the damages will be.
Similarly, the longer those posts are on the site before removal, the higher the damages. Even if the party about whom the statement was made does not lose any sales as a result of it, they can still claim damages for loss of reputation.
For more on Seafolly & Madden, search ‘Seafolly’ at www.davies.com.au
About the author: Liz Lawson is a Lawyer with IP specialists, Davies Collison Cave. She specialises in litigation, including actions for patent, trade mark, design and copyright infringement, passing off and misleading and deceptive conduct, as well as contractual disputes. She also advises clients in relation to these actions, on strategies to resolve disputes and negotiates settlements.
