The rise of social media in recent years has had a significant impact on people’s private lives. For instance, approximately every seventh citizen worldwide is a member of Facebook, the most well-known social media site. Other prominent social media platforms include Twitter and YouTube. These so-called ‘Web 2.0’ services have one thing in common – users themselves make content available and distribute it via the (almost unlimited) medium of the Internet.
It is therefore unsurprising that an increasing number of companies now use social media for business purposes. Such use facilitates direct contact with potential or existing customers. For instance, when users ‘like’ a company’s Facebook profile, they receive notifications of relevant real-time news. The news appears at the same level as status updates from friends. Users and potential customers can be authentically and subtly provided with company messages within their Facebook environment. The same opportunities are also available via other social media channels, such as Twitter and YouTube.
However, the opportunities and advantages offered by social media platforms also present their greatest challenges. Both private persons and companies often forget that such services do not exist in a legal vacuum – the normal legal framework is still applicable. Thus, all relevant national legal provisions will apply – in Austria, these particularly include the Civil Code, the Unfair Competition Act, the Copyright Act and the Criminal Code.
Exaggerated expressions of opinion and spreading of untrue facts
The promptness and immediate availability of social media can mislead persons and companies into sharing their feelings about competitors without further consideration (eg, by making statements such as “The managing directors of Company A are all idiots” or “Everybody knows that Company B processes horse meat instead of beef”). However, the person making such statements must expect legal consequences. The company itself (not Facebook or Twitter) acts as content provider and is therefore liable for such publication, even if employees act on its behalf.
The consequences of such misconduct on social media platforms are numerous. Section 1330(1) of the Civil Code punishes any assault on human dignity through offence, abuse and insulting behaviour (as would apply to the “all idiots” comment above) with the aim of protecting the honour of the person concerned. Section 1330(2) of the code contains the distribution of untrue facts (as would be the case in the horse meat example above) that threaten the credit, acquisition and advancement of others.
In addition, the competitor can take legal action under Section 7 of the Unfair Competition Act against another competitor following false posts for competition purposes. In contrast to Section 1330 of the Civil Code, the person who has made the statement has the burden of proof – it is not up to the claimant to prove that the statement is untrue, but rather up to the author to prove that it is accurate. The person or company concerned is entitled to claim for an injunction and the removal of the post. In addition, publication of the judgment can be requested directly through the medium concerned. The Austrian courts have already ruled that such publication can be conducted directly on Facebook or via video on the company’s YouTube channel (Commercial Court of Vienna, 10 Cg 115/10g)
In a worst case scenario, the author of such comments may face criminal consequences. The author may be held liable for offences such as defamation (Section 111 of the Criminal Code), libel (Section 115) or defamation of business reputation (Section 152). In addition, falsely accusing a competitor of a criminal offence is punishable by a term of imprisonment of up to five years (Section 297).
Dangers of pretending greater popularity
It is not only private individuals that compete with each other to have the most ‘friends’ on Facebook or ‘followers’ on Twitter. Companies have also realised that the amount of company-admitted users (equivalent to one ‘like’) is an important reputation-building factor on social media platforms, and one which continues to increase. Some companies choose not to increase the number of users by improving their performance or offering an informative web presence. Instead, they take the easy way out and buy fans. For instance, “real German fans” have been offered in packages of 100, 250, 500 or 1,000 people. From a legal competition point of view, such a purchase is highly disputable. In doing so, the company is implying a greater user reputation than it actually has. This behaviour can be qualified as unfair (under Section 1 of the Unfair Competition Act) or misleading commercial practice (Section 2).
Similar consequences must be faced by a company that gives a positive assessment of its own products and services by pretending to be a user. In such case, not only are users misled about the attributes and quality of a product, but the action falls under the black list of actions detailed in the act. This list enumerates the behaviour that is deemed to be misleading or aggressive without further consideration.
As a consequence of behaviour that violates the act, the company must expect legal claims for omission (Section 14), removal (Section 15), compensation (Section 16) and publication of judgments (Section 25). To speed up proceedings, claims for omission and removal can also be enforced via a preliminary injunction (Section 24).
Copyright implications of posting third-party images
No matter how concisely text is worded, it is often inevitable that images are used to accompany posts on social media platforms. Some companies believe that images found on the Internet are common property that anybody can use. This is a misconception, as is the mistaken belief that infringements will not attract attention or cannot be discovered by anybody. In fact, the publication of images without the permission of the right holder is a violation of the person’s exploitation rights under the Copyright Act. Thus, the company acting unlawfully must face claims for omission (under Section 81 of the act) and removal (Section 82).
In addition, the rights holder is entitled to payment of adequate remuneration, regardless of any fault (Section 86(1)). In practice, the fee calculator of Austrian commercial photographers is used to provide a guideline for the amount of such remuneration. In case of fault, the entitled person can claim double the amount of remuneration (Section 87(3)). Furthermore, publication of the judgment can also be claimed (Section 85). For commercial violation of copyright, the infringer must face imprisonment of one to two years (Section 91(2a)). Thus, the unauthorised use of images on social media platforms is clearly anything but trivial and can entail considerable legal consequences.
Use of photos of persons for advertising purposes
Even the use of a company’s own images on social media platforms can cause legal problems. Caution is especially required when other persons are shown on the photos, as their portrait rights may be violated. Section 78 of the Copyright Act provides that certain limits, including the “legitimate interests” of the photographed person must not be violated. Such interests are violated not only when pictures expose somebody or affect privacy in other ways, but also when they are used for advertising purposes. Therefore, the popular practice of using a neighbour as a testimonial (eg, holding the product in his or her hands) must not occur without the permission of the person shown, as the person shown is exposed to the suspicion of having made his or her portrait available for advertisement. The legitimate interests of a person can also be violated even if the presented product does not contain offensive content. Thus, the advertising company should always obtain permission from the person shown that explicitly specifies use for advertising purposes on social media channels.
The above scenarios are only a selection of the situations in which companies may find themselves when using social media platforms. Social media is a valuable resource, but the relevant activities must be reviewed under the same legal aspects as would apply to any other online or offline activity. The fact that social media is a recent and more dynamic form of media does not mean that real infringements will be treated in an accommodating manner. On the contrary, experience has shown that violations are likely to result in immediate warning letters or even claims.
Besides clarifying their own activities, companies are advised to issue guidelines for employees regarding the use of social media. Such guidelines concern the use of social media for both private and professional purposes. On the one hand, the framework in which private use is tolerated must be defined; on the other, the company must establish guidelines that determine how employees should present both the company and themselves in a professional context. The more sensitive the sector (eg, pharmaceutical industry, banking sector), the more important it is that clear guidelines are issued. This should include the use of social media via the company’s infrastructure, as well as via private devices during working hours. Independent from the ownership of such devices, the activities of employees may directly affect the employer.
For further information on this topic please contact Axel Anderl or Andreas Seling at DORDA BRUGGER JORDIS Rechtsanwälte GmbH by telephone (+43 1 533 47950), fax (+43 1 533 4797) or email (firstname.lastname@example.org or email@example.com).