With the rise of social media as a powerful marketing tool, Australian businesses and individuals face both opportunities and significant legal risks. Careless or deceptive marketing practices and reviews can lead to lawsuits, fines, and reputational damage. Understanding the legal landscape and the possible repercussions of uncareful or incorrect social media practices is essential for anyone involved in digital marketing.
FALSE OR MISLEADING ADVERTISING
Under the Australian Consumer Law (ACL), false or misleading advertising is prohibited. Section 18 of the ACL, which covers misleading or deceptive conduct, is especially relevant.
Misleading claims, such as exaggerating product benefits or making unsubstantiated statements, can lead to consumer lawsuits or action by the Australian Competition and Consumer Commission (ACCC). This includes cases where a business advertises ‘organic’ or ‘Australian-made’ products without verification.
For example, if a skincare company posts a review or an influencer claims that a product ‘cures acne overnight’ without credible evidence, it may be seen as misleading. Consumers misled by such claims could sue for compensation, and the ACCC can impose penalties.
Businesses must ensure that all social media and email content does not mislead or deceive customers, either intentionally or inadvertently. Statements about products, pricing, and offers must be accurate and not give false impressions. Particularly, offers on social media must only be made if the business can supply the advertised products or services in reasonable quantities.
While influencers may create their own content, the business is responsible for ensuring that any shared content complies with the ACL and does not make misleading claims.
Some states and territories require permits for social media contests. If running a nationwide competition, check if a permit is necessary and ensure that the terms and conditions are clear and easily accessible. Moreover, you are to provide clear instructions and eligibility criteria for participants and outline any entry fees, deadlines, and prize details to avoid confusion and disputes.
INFLUENCER AND ENDORSEMENT TRANSPARENCY
The ACL mandates that endorsements and reviews on social media be honest and transparent. Influencers and businesses must disclose any sponsored content or relationships.
Failure to disclose a paid partnership or gifted product can mislead consumers, which may lead to legal action. The ACCC has warned that influencers and businesses involved in deceptive practices may face investigations and fines.
For instance, an influencer promoting a beauty product without stating that it was a paid promotion could face consequences if consumers feel misled. If a customer buys the product based on a falsely presented review, they may claim damages for being deceived.
It is crucial that influencers or affiliates clearly disclose any partnerships or sponsorships. Influencers must also clearly indicate if a post is sponsored by including tags such as #ad, #sponsored, or similar phrases.
DEFAMATION CLAIMS FROM NEGATIVE REVIEWS
Defamation law in Australia protects individuals and businesses from statements that can harm their reputation. Negative or false reviews may give rise to defamation lawsuits if the content is damaging and untrue.
If a business posts negative comments about a competitor or an individual falsely accuses a business of poor practices in a review, the aggrieved party may sue for defamation or injurious falsehood. While defamation primarily protects a person’s reputation, injurious falsehood protects a person’s commercial interests.
An example is that a restaurant owner who leaves a disparaging, untrue review about a competitor may be taken to court for defamation if the review causes reputational harm. Similarly, if an individual’s publication (which was widely viewed) conveyed serious defamatory imputations that significantly harmed a business’ reputation, it may give rise to defamation lawsuits.
COPYRIGHT AND INTELLECTUAL PROPERTY INFRINGEMENT
Social media posts often involve images, videos, or music, which may be subject to copyright. Using someone else’s intellectual property without permission can lead to copyright infringement claims.
Reposting content without consent, using copyrighted music in videos, or failing to credit an artist or creator may result in a lawsuit. The Copyright Act 1968 (Cth) protects creators’ rights and allows them to sue for unauthorised use.
For example, a clothing brand using a photographer’s image without permission on Instagram may face a lawsuit if the photographer claims copyright infringement.
You should only use images, videos, music, and other content you have created or have a license to use. Copyright infringement on social media is a common issue, so double-check permissions, particularly if using user-generated content. When reposting or sharing third-party content, you should provide credit and obtain consent where necessary.
PRIVACY VIOLATIONS AND BREACH OF CONFIDENTIALITY
Privacy law in Australia, including the Privacy Act 1988 (Cth), protects individuals’ personal information. The improper sharing of someone’s private data or confidential information on social media can lead to lawsuits.
Posting images or information without consent or sharing private data obtained through a business relationship can lead to legal action.
For instance, a healthcare provider who shares patient testimonials without permission on social media could be sued for breaching patient privacy.
Businesses should only collect personal information if it is necessary. If social media marketing involves gathering personal data, be clear about the purpose and how the data will be used and obtain consent where needed. As social media platforms often collect user data automatically, businesses must clarify what data is collected and used in their privacy policy.
Further, if you use third-party platforms (e.g., Meta, Google) for ads, ensure these platforms are APP-compliant, particularly if data is transferred outside Australia. You must provide a way for customers to opt out of data tracking or data sharing arrangements, especially when it involves retargeting ads on social media.
UNFAIR COMPETITION AND TRADE PRACTICES
The Competition and Consumer Act 2010 (Cth) prohibits businesses from engaging in illegal behaviour damaging competition.
Engaging in unfair practices that cheat consumers and other businesses, such as posting false reviews about competitors, can be considered anti-competitive and unlawful.
For instance, creating fake profiles to post negative reviews about a rival business could lead to litigation and hefty fines if deemed anti-competitive.
Businesses must avoid using false testimonials or unverifiable claims. Ensure that user reviews and testimonials are genuine.
EMAIL MARKETING
Under the Spam Act 2003 (Cth), marketing emails and messages require express or implied consent from the recipient and must have a clear opt-in process where users voluntarily agree to receive marketing communications.
In addition, the sender’s identity should be clear, with contact details allowing recipients to easily identify the business. Finally, all email and SMS marketing communications must include a simple and functional ‘unsubscribe’ option.
This overview highlights some of the core legal risks. Please contact The IP House Lawyers for detailed legal advice to understand your obligations and best practices for compliance in digital marketing.
For any further information or queries on the above content, please contact us.
The Author
Jean Kallmyr | Lawyer, The IP House Lawyers | t: 0435 799 831 | e: admin@theiphouse.com.au
Key Contact
Claire Darby | Managing Director/Lawyer, The IP House Lawyers | t: 0412 998 951 | e: claire@theiphouse.com.au
Disclaimer
The information and contents of this publication do not constitute any legal or financial advice. This publication is intended only for reference purposes for The IP House Lawyers’ clients and prospective clients.
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