Liability and Facebook

According to Facebook’s “Facebook for Business” page[1], there are over 900 million people currently holding Facebook accounts. That is a staggering amount. It is no wonder that in 2011 it was estimated by ZNet.com[2] that nearly two-thirds of all small businesses had a Facebook page. Clearly Facebook is an advantageous marketing tool because the page itself is free and the advertising offered is relatively inexpensive when compared to the price to reach a similar market volume.

However, businesses should be aware of the potential liabilities created by having a Facebook page. Recent court decisions by the Advertising Standards Board in Australia demonstrate the liabilities created by allowing public comments to be made on a company’s Facebook page. Although the decisions are Australian-based, for those companies in the United States, these decisions provide guidance on what steps can be taken to prevent or at a minimum, limit, liability.

The Advertising Standards Board issued this opinion:

“A Facebook site of an advertiser is a marketing communication tool over which the advertiser has a reasonable degree of control and could be considered to draw the attention of a segment of the public to a product in a manner calculated to promote or oppose directly or indirectly that product… As a Facebook page can be used to engage with customers, the Board further considered that the Code applies to the content generated by the advertisers as well as material or comments posted by users or friends.[3]”

The advertising of US-based businesses, including franchises, is regulated and businesses should understand and be aware of the regulations and guidelines and make sure that they are complying in all their marketing and advertising –including on Facebook and other social media sites.

In July we posted a blog about what employers should know about social media policies (see http://tinyurl.com/83wt2ym). In order to help avoid liability from customer posts on a business’s Facebook page, the social media policies should include the manner in which the company plans to handle posts that have the potential to create liability, and these policies should be shared with employees and any outside parties that have access to or control your social media sites.

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[1] https://www.facebook.com/business/overview

[2] http://www.zdnet.com/blog/facebook/two-thirds-of-small-business-owners-use-facebook-for-marketing/1529

[3] http://www.lexology.com/library/detail.aspx?g=bcfa3cdc-cd11-404f-a3c5-a8f7dd0c5bba