Social Media Scandal: When your big mouth can cost you big bucks
Christmas has been and gone and summer is in full swing. For those of us who have over-indulged the idea of putting a swim suit on can be unappealing at best and depressing at worst. Despite this, summer is bikini season! With this in mind, we reflect on the case of Seafolly Swimwear v Maddenwhere the social media burns caused more than just an ugly tan line.
So what happened?
Leah Madden runs her own swimwear line called White Sands. It is in competition with Seafolly Swimwear. In September 2010 Madden posted7 photos of Seafolly garments next to her own brands designs on her personal Facebook page and suggested they were too similar. These posts implied that Seafolly had copied her designs when Madden gave a preview of them to potential buyers. Madden then went on to make further comments about the copying and sent the details to news broadcasters in the hopes they would publish her comments.
In fact, it was shown that Seafolly’s designs were on the market before Madden had provided her preview where she said the designs were copied. This landed her in hot water and resulted in a significant payment to Seafolly for the damages she caused to their brand.
What does the law say?
Misleading and Deceptive conduct occurs whena person makes a statement or engages in actions which say or imply a point of view as factually correct when it is actually false.
In discerning whether social media posts are misleading or deceptive the court will look to what a reasonable person would conclude and how they use social media.
Why should I care?
This case is important as it shows that what you say on your personal social media can be shown to be “in trade and commerce” on behalf of your business. As a result, you may be liable for the posting of these comments where they prove to be false and impact on a brands reputation and sales.
Practically, if you post information on social media about a competitor or bolstering up your own business, and it turns out that what was said is not the truth, you could find yourself in the same position as Madden
Take away messages from Seafolly
Do your research before posting anything (good or bad) about someone else on social media. This is particularly the case where you run a business and the comments are made about a competitor.
Never forget that even if the statements are placed on your personal ( as opposed to business) social media site that this may still be considered to be “in trade and commerce” within the meaning of Australian Consumer Law.
If in doubt, seek legal advice before making any comments. In a world where news travels quickly and social media posts are difficult to delete, it is important that you do not make statements that you are not willing to stand by. In Seafollysome of the posts by Madden were up for less than a few days, and it was still considered enough to damage Seafolly’s reputation and put Madden out of pocket.
About the author:
Haley Graydon is a law clerk at Lynn & Brown. Haley is a recent law graduate from UWA. The areas of law that Haley has a keen interest in is family law and estates.