An Australian court has ruled that comments posted by members of the public on Facebook advertisements should themselves be classed as advertisements – potentially forcing the advertiser to vet the comments.
Australia’s Advertising Standards Board ruled that posts made on Smirnoff’s Facebook page must comply with advertising laws – upending Facebook’s financial model and opening a can of worms as comments posted globally can all be viewed in Australia.
This leaves companies liable to being sued if they allow content which makes false claims about a product or includes racist or sexist language to appear on their pages.
Analysts predict that the Australian ruling could just be the tip of the iceberg with a flood of similar rulings expected from other jurisdictions.
Chris Watson, a partner at law firm CMS Cameron McKenna, said: “There used to be no downside to advertising on Facebook. Now the free lunch is over and reality has intervened. Companies have to take responsibility”.