Business Law

Social media and small business – with great power comes great responsibility

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The increasing use of social media has had a profound effect on the way that people do business. The ability to reach a large market for low cost and engage with customers and potential customers in real time can have a major positive impact on your business.

However, with the benefits also comes the risk from both improper use and loss of rights. There are legal risks to be aware of before using social media for your business, three pertinent legal risks being:

  • Copyright;
  • Defamation; and
  • Misrepresentation.

Many social media websites have terms and conditions that affect the ownership of copyright. Some sites stipulate that any copyright in content is lost once it is uploaded; so once you have published this material online, you have not only lost practical control, but often legal control. Any value that you may have had in the copyright is effectively dissipated.

You must also be careful to ensure that any social media posts are not defamatory. There is an obvious risk with social media, in that content can be spread instantaneously and reach a potentially global audience; carrying significant damages as well.

Finally, consumer protection laws against misleading and deceptive conduct apply to social media. Importantly, these rules don’t just apply to your own content; they also extend to third party content that you share on your social media channels or content left by third parties. Where you allow the content of third party posts to remain on your page, you can be taken to endorse the views in that content and subsequently be held liable for them.

Every business should establish strategies to mitigate its risks. Where your social media involves a lot of user content and customers actively engaging with you, it is crucial that you draft appropriate terms and conditions for:

  • sourcing materials for publication;
  • vetting of what is published in your name; and
  • ascertaining what rights you lose from the terms of the platform you use to publish.

As a natural consequence, be sure to monitor your accounts regularly by staff trained for this role so that inappropriate content can be removed sooner rather than later. Where you hold user’s personal information, it is advisable that you have a clear, well-drafted privacy policy that sets out your responsibilities and obligations. If you don’t have any of these measures in place, you should establish strategies before a Facebook post or Tweet comes back to haunt you.

Mark Love, Legal Director, Business Law
9th Floor, Canberra House,
40 Marcus Clarke Street, Canberra ACT 2601
E: [email protected]
T: 02 6274 0810 |

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