Social media and the law: Starting your business on Facebook does not exempt you from the law

Facebook is a great, inexpensive way to test interest for your startup idea and to informally promote your business. But just because you are starting your business on Facebook does not mean you are exempt from legal or regulatory requirements.

The law still applies

You still need to comply with Australian regulations even if you start your business through social media.

Just because you are starting your business on Facebook, other social media or even setting up a shop via one of the large online shops, does not mean you don’t need to comply with the Australian regulations, including consumer law.

You not only need to ensure you comply with your chosen social media channel’s own terms of use for your ad and promotional campaigns but also all the Australian rules, regulations, industry codes and standards relating to advertising, privacy and all things consumer law related.

Otherwise you may be fined or without a business at all. Last year, Bendon did a promotion encouraging people to upload photos of themselves and their best friends (in Bendon lingerie) to win a prize on Facebook. This was quickly shut down by Facebook and considered a breach of ethical code.

There is no special or specific law yet relating to social media in Australia. Despite this, it is covered by general consumer law, rules, regulations and contained in advertising and industry codes and we are beginning to see cases in court which will form the precedents for new regulations.

Social media terms and conditions protect them not you

Social networking sites like Facebook, LinkedIn and Twitter are increasingly being recognised as legitimate marketing tools. All the social networking sites along with the large shopping e-commerce platforms such as Etsy, Big Commerce and Amazon all have terms and conditions-but they protect them and not you.

And if you read the terms carefully, you will see that you are actually indemnifying them for any claims, litigation or issues that an individual may have with any content associated on your account site. This is true even if you didn’t put it there yourself.

Did you know Facebook owns your customer list?

Facebook is a great way to start a business and access a large customer base. But did you know Facebook owns your customer list? They can close your Facebook page at any time without notice and overnight and your business is gone. They don’t need a reason. This is one reason why you should consider setting up a website ASAP with your goods and services and reading their terms of service.

Minimize your risk

You are responsible for all content on your website and social media accounts.

Don’t make ‘over-statements’ or claims on your Facebook or other social media pages that you wouldn’t make in any other type of advertising. Monitor your social media pages and remove any posts or advertisements that may be false, misleading or deceptive as soon as you become aware of them. This is what the ACCC would expect you to do with any other type of advertisement and they expect it on social media as well.

And don’t allow others to make misleading claims or defamatory comments on your website or social media. You are responsible for posts or public comments others make on your social media pages also.

You should establish clear ‘house rules’ that apply to the actions of your fans, friends and followers when using your social media pages. These rules should be prominent on your social media pages. You then need to block users who breach those rules.

There are no specific or different consumer laws or rules in place for social media. Consumer protection laws which prohibit businesses from making false, misleading or deceptive claims about their products or services have been in place for decades. These laws apply to social media in the same way they apply to any other marketing or sales channel.