Think before you post – social media and misleading and deceptive conduct

The advent of social media like Facebook has proven to be an invaluable marketing tool for many businesses. However, the contemporaneous nature of social media has meant that some businesses have become complacent with their use of social media. Social media ought to be utilised like traditional forms of advertising and business must take care that comments, and even opinions, that may be misleading, deceptive or defamatory are carefully reviewed before posting.

Seafolly Pty Ltd v Madden [2012] FCA 1346 provides a recent example of circumstances where comments on Facebook were found to constitute misleading and deceptive conduct. Leah Madden, the designer of White Sands Swimwear, made a number of comments about her competitor, Seafolly, on her personal Facebook page and by email including:

1. Posting photos on Facebook of Seafolly swimwear entitled “The most sincere form of flattery?” and captioning them with names of White Sands’ designs.
2. Making comments to the effect that Seafolly had ‘ripped off’ White Sands’ designs;
3. Emailing a number of media outlets photos of Seafolly swimwear and comparing them with her allegedly earlier designs.

The photos were removed from Ms Madden’s Facebook page within about 30 hours of being posted and Ms Madden alleged she was expressing her honest opinion regarding the Seafolly designs.

Despite the fact that Ms Madden did not expressly allege that her designs had been plagiarised by Seafolly, her statements on Facebook and by email were found by the Court to contain false representations that Seafolly had copied White Sands’ designs. The Court also found that Ms Madden was reckless in making the comments, in that she did not investigate whether there was any truth to her allegations before posting the comments. A majority of the Seafolly designs were on the market before the alleged copying had occurred.

Even though the comments were posted on Ms Madden’s personal Facebook page, it was still found that Ms Madden had targeted potential customers with statements regarding her competitor Seafolly that were not true.

Ms Madden was ordered by the Court to pay to Seafolly $25,000.00 for damage caused to their reputation, even though there was no evidence of loss of actual sales by Seafolly.

The moral of the story is, when using any form of social media for business, be careful what you post.

If you require any advice regarding use of social media in business, contact McLaughlins, your Gold Coast lawyers.