Small business snookered by social media rule

There's no question. The internet has liberated people and, in particular, for people who are or want to be self-employed it has opened up undreamt of business possibilities. It's exciting and it's only the beginning.
But wait. Regulators have a gleam in their eyes. They are working out how to bring the internet under their control. Try this development on for size!

If you're promoting your business through social media (Facebook, YouTube, Twitter, etc) any comments anyone posts on your social media site have now been declared ‘advertising', by you. You are responsible. If the ‘advertising' (someone else's comments) breaches the law you will be held liable.

This quite startling development has come about thanks to a decision by the peak Australian advertising regulator. It's sent the legal profession and the advertising industry into a twitter! (Oops! Have I just committed an advert?)

What appears on ads is self-regulated through the Australian Association of Advertisers, comprising all the big advertising firms. The association has a code of advertising conduct administered by the Advertising Standards Board. The codes are primarily about stopping on advertising inappropriate language, images, portrayal of violence, sexual appeal and sexualised images. That's all good.

Recently the ASB handed down a decision on a complaint about social comment on a Facebook page run by Smirnoff (the vodka drink brand). The ASB found that Smirnoff had not breached the advertising code. But the ASB declared that comments/postings made on the Facebook page are advertising.

This is one of those examples where a regulator is overstepping their brief and extending their power by stealth.

To the common sense person advertising involves a deliberate decision by a business to design a message and to pay to have that message placed in a media outlet. It's obvious that social media has morphed how messages are delivered into something new. The difference between ‘advertising' and social media is that social media relies on what other people say and they are not paid or pay to say what they say. It's called ‘opinion' and it's about people talking.

Yes, of course companies have grasped social media to promote their products. It's a more credible form of promotion because it relies on one key element, the unpaid opinions of people about a product. It's also a highly risky form of promotion. Just as people can make positive comments about a product, they'll also trash it. Social media can and does destroy the reputation of products or services if the products or services don't meet the expectations of people. This is the ‘market' operating to its most devastating effect.

But regulators are now seeing something they must control. By declaring social media sites to be ‘advertising' the Advertising Standards Board has effectively said it has the right to be an overseer of people's individual comments and opinions. The Advertising Association is requiring companies to monitor social media sites "…a few times during the business day.”

Now dovetail this expanded definition of ‘advertising' with a successful conviction last year by the Australian Consumer and Competition Commission. In ACCC v Allergy the company was convicted for false, misleading and deceptive conduct on their Facebook page. The conviction was understandable given the company had given undertakings to the ACCC not to allow false statements on their social media outlets which they breached.

Clearly companies must be responsible for the way they represent their product/services. But the ACCC-targeted prosecution of a repeat offender is significantly different to the Advertising Standards Board imposing a sweeping redefinition of ‘advertising'.

This is a typical ‘big business' approach to regulation extension. The ASB is run by big business for big business assuming that big business can cope with new regulation requirements. But what about the bulk of business; small business people who make up 96 per cent of businesses? Are small business people expected to monitor their social media sites several times every day?

Comments made on social media sites are not ‘advertising' if common sense ideas apply. The ASB extension of its regulation powers is silly. It would be like the ASB declaring that people talking in a bus about an advert in the bus constituted ‘advertising'. And then requiring the bus company to monitor and control what people were saying.

The internet and social media is built upon freedom of expression. This is what makes this new technology liberating and exciting. It offers ordinary people a pathway to create their own business, releasing people from the dependency of having to work in a ‘wage-slave' environment of big business.

Yes, the internet and social media offers regulators challenges. It's an issue of balance. The ASB should review its decision that social media comments constitute advertising. It should at minimum consider small business issues. Rather than trying to regulate social media as if it's old media the ASB should conduct a proper review taking social media for what it actually is.

Ken Phillips is executive director of Independent Contractors Australiaand author of Independence and the Death of Employment.