Social Media and Misleading Consumers

Competition & Consumer Law

How do you protect your business when you are not sure what you can say on social media?

Everyone says whatever they want on social media. Sometimes it’s funny. Sometimes it’s embarrassing. Sometimes it’s annoying or just plain dumb, but it doesn’t really matter because it’s online, right?

Until it actually matters.

In the business world, legal regulations apply as much online as they apply offline.

Social media has entered the courtroom and many businesses have suffered from being unprepared. Don’t get the goose bumps now - social media is nothing that your company should be afraid of if you know how to protect your business, employees and customers.For a genuine brand with integrity, social media can only increase the business’ audience and enable it to share successes.

However, many business owners make the mistake of misleading consumers on social media not because of the intention to do so, but because they don’t realize which laws apply to them.

How businesses mislead consumers and why this is dangerous (for the business)

False representation of a product or service’s feature is against the law according to the Australian Competition and Consumer Commission (ACCA). Business owners have the full responsibility that any content related to their products and services online is accurate, irrespective of who put it there - the director, employee, partner or customer.

If you say that you have the best coffee latte in the neighbourhood, you need to back that up. The same rules apply as with offline advertising and publishing. You can’t falsely represent information. If that’s the case, the ACCA might force you to refund all of the customers that have purchased based on your false representation.

How and why employees mislead consumers on social media

Even if you review every social media post that goes out in the world personally to make sure there is no misleading information in it, you can’t possibly review all of the posts, comments and shares of your employees. But they are the business owner’s responsibility. When an employee says that your products are the best, you need to back that up. Or they need to identify themselves as expressing personal opinion only. Whenever employees post on social media, they can do it as representatives of your business or not, but they need to notify their audience which one it is.

An accountant in your software company might answer an inquiry from a friend about the features of your software application without being aware that this feature has been removed from the latest version. The friend buys the application and discovers that they didn’t get what they needed. The customer is misled and you will need to refund their purchase (See how even good intentions can ruin it for your business?)

How consumers mislead other consumers on social media

Customers and users of your products and services post reviews all the time on social media. Their posts and images might be intentionally or unintentionally misleading as well. According to the ACCA, you are responsible for monitoring social media and responding to all comments that might mislead consumers.

Your social media team needs to regularly monitor the online space about new posts, tweets and videos featuring your products and services and make sure that the information is correct. The best protection against misleading consumers and claims is knowing the Australian Competition & Consumer Law and making sure your employees know it well too.

You can do that in two simple ways:

  • provide legal training for all of your employees on the topic, or
  • draft complete social media policies and attach them to employment agreements so that everyone is on the same page about what they can and can’t say online

If you are not sure how to initiate any of these, get in touch with your lawyer, she can help you protect your business on social media with thoroughly drafted social media policies and reviewing your current activity.

Katherine Hawes

Solicitor at

I am the founder of Digital Age Lawyers and Aquarius Education. This is a different type of law firm as we believe everyone should have access to quality legal services with no hidden costs or expensive 'charging by the minute' for a reassuring chat. Small Business Owner? Find out more about our Small Business Packages to gain access to legal expertise on a routine basis for a fixed affordable rate.

Comments (1)
Jef Lippiatt

Jef Lippiatt, Owner at Startup Chucktown

It is best to always be transparent and clear. A dissatisfied customer will spread their feelings 5 to 10 times more than a happy customer. Always take a proactive extra step approach to resolve issues. You may still not be able to satisfy all unhappy customers, but most will notice that you put time and care into trying to resolve the matter fairly in a timely manner.