A recent Federal Court decision has highlighted a new risk for administrators of social networking sites.

In the case of ACCC v Allergy Pathway Pty Ltd (No.2), the ACC brought contempt proceedings against the company and its sole director.  This followed earlier action where ACCC had brought proceedings for misleading and deceptive conduct, relating to representations made by the company about its product, and leading to undertakings from both the company and its director that it would not make the representations alleged for aperiod of three years.

The second action was brought by ACCC because the company continued to have, on its Facebook "wall" and Twitter pages, testimonials from its customers,which testimonials directly breached those undertakings by their content.

Despite the fact that these testimonials were placed there by third parties, the Court agreed with the case presented by the ACCC that because the company, and its director, had control of the sites, and was aware of the content posted, and could have removed it, they were responsible for that content, and therefore was held to have 'published' it and thereby breached their undertakings.

An analogy was made between the so-called "bulletin board" cases, which found that a party that controlled premises was treated as having published defamatory material when the material was published by a third party because it had knowledge of the publication and did nothing about it.

Key aspects are accordingly, knowledge and control. This case establishes a test to determine when the administrator of a social networking site will be taken to be accountable for statements posted by third parties.

The clear warning, if your business has a social networking site, is to carefully monitor, and remove if necessary, posts to the site.  If you have control, you can be responsible.

If you would like further information on this issue, or would like advice on other aspects of business (including dispute resolution), please contact Chris Morey by email (chrism@lewisholdway.com.au) or phone (+61 3 9629 9629).