UPDATE – Britain’s Advertising Standards Authority has said it has no plans to change the way it views user generated comments on social networks following the decision by the Advertising Standards Bureau in Australia (see comment below).

TUESDAY - A very significant ruling has been made by Australia’s advertising watchdog that effectively says that Facebook is an advertising medium and that as a consequence brands must vet the comments and posts of users appearing on their pages.

Brands that have previously had a light touch to vetting user comments could not be forced to be far more vigilante and ensure that sexist, racist or factually inaccurate posts are not made.

It could also prove to be a costly ruling for Australian brands using social media who might now have to closely monitor all user generated content.

Australia’s Advertising Standards Board has ruled that posts on Smirnoff’s Facebook page are advertising no matter who made them and so must comply with  industry self-regulatory codes.

This ruling came even though the ASB dismissed a complaint about Smirnoff’s Facebook page, which centred on sexism, under-age drinking and obscene language. However, it still ruled industry codes applied not only to what a company was posting on its Facebook page but to the user-generated comments that followed.

John Swinson, a partner at law firm King & Wood Mallesons, told the Sydney Morning Herald that ASB’s ruling “turned people’s opinions into statements of facts”.

Swinson said that if, for example, a member of the public posted a comment on Smirnoff’s site that claimed it was the purest Russian vodka and would lead to success with the opposite sex and Smirnoff failed to remove it, the company could be liable on a number of counts.

“Smirnoff is Australian not Russian. So that is false. It may not be the purest so that could also be misleading.

”And to imply that you would have greater success with girls would contravene the advertising codes,” said Mr Swinson.

Swinson adds that because the Australian competition watchdog is cracking down on claims made by companies in social media, mostly be agencies on behalf of clients, advertisers he says could end up in court.

This could lead to serious additional costs in maintaining a presence on Facebook, and other social media sites, as advertisers will have to factor the cost of vetting user comments into their budgets.

That could prove expensive as it means that someone has to be moderating the pages all the time.

Many pages put up by advertisers are done by their agencies and are not necessarily monitored day in and day out. Often they are only checked during the course of a campaign.

David Ellison, marketing services manager, at ISBA agreed that the ruling could have adverse affects for marketers considering Facebook.

“This ruling could well have global implications and advertisers in the UK will no doubt wait with keen interest for reaction from the Advertising Standards Authority, whose remit includes online marketing.

“Having to provide regular vetting of posts on Facebook might have an adverse effect on its appeal to advertisers. In theory, members of the public using abusive language, or making false claims about a product or service on an advertiser’s Facebook page, might lead to the organisation being sued unless the comments are identified and taken down promptly.”

From the UK 

 Lynsay Taffe, director of communications, marketing and public affairs at the ASA said that while ASA’s remit was extended last year to cover marketing on brand sites and social media sites UGC is only within its remit if it considers the advertiser has adopted and incorporated it into its own marketing communication.

“We take decisions on a case by case basis, taking particular account of the context in which the UGC is placed. For example, the ASA is likely to take a very different view of a consumer’s positive comment that has been posted, by the website owner, in a prominent way on the front page of its website, than if that same comment appeared within the context of a consumer message board moderated for harmful and offensive language or images only.  By and large we consider UGC to be in remit if:

1. The company in question has taken that comment and adopted it into its own marketing communication (e.g. highlighted it so it acts as a testimonial; responded to the comment in a way that endorses it; re-tweeted it)

2. If the advertiser actively manages comments rather than simply moderates them (basic moderation would include deleting offensive or abusive comments) if they actively remove, for example, all negative comments about their brand, we would consider this to be turning positive comments into marketing communications.

“Finally, if the advertiser solicited comments that were irresponsible or misleading, we would regulate the solicitation e.g. an alcohol company asking customers to send in extreme drinking photos.”

CAP, the industry body that writes the UK Advertising Code which sets the ASA’s remit, is currently running a two-year review of the online remit of the CAP Code, so the Australian decision doesn’t prompt anything in review terms in the UK.

As part of that review, CAP will consider how the UK remit is working and will consider representations from third parties. Although it hasn’t had any on this particular point.