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Facebook advertisers forced to vet user comments

7 August 2012 No Comment

The Advertising Standards Board ruled that posts on Smirnoff’s Facebook page are effectively advertising, regardless of whether they were made by the company or a member of the public, and should therefore comply with advertising laws.

The judgment has already caused widespread concern in Australia and threatens to undermine Facebook’s advertising on a worldwide basis, as posts made by users in any country can appear on companies’ Facebook pages.

Advertisers will have to factor the cost of vetting user comments into their plans for advertising on Facebook, whilst constant policing could also undermine the power of Facebook as an advertising platform, experts said.

“There used to be no downside to advertising on Facebook,” said Chris Watson, a partner at lawfirm CMS Cameron McKenna. “Now the free lunch is over and reality has intervened. Companies have to take responsibility”.

He predicted that the ruling in Australia would be “the first of many” similar rulings around the world.

Any posts that make false claims about a product, or include racist or sexist language, will leave companies vulnerable to being sued unless they are removed.

If, for example, a user claimed that Smirnoff vodka was the purest Russian vodka or it could lead to success with women, the company would be liable on multiple counts, John Swinson, a partner at King & Wood Mallesons said.

“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.”

Simon Mansell, chief executive of advertising group TBG Digital, said the ruling seemed “over the top” but would cause Facebook advertisers “short-term pain”.

Facebook’s value has nearly halved since its initial public offering in May at $38 a share. Earlier this month the social network admitted that more than 80m of its users accounts could be “fake”.

Facebook declined to comment.

Meanwhile, the company is to launch a bingo app in the UK tomorrow where punters can stake real money for cash prizes.

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