Social media has trade practices traps

Any online endorsements have to be genuine or they can be expensice

A Taiwanese case shows how expensive it can be to pretend to be someone you're not online if you are a corporate, as Samsung has found. And while it's a Taiwanese case, the same situation could well apply in Australia.

According to PC World:

Taiwan has slapped Korean electronics giant Samsung with a fine for fabricating Internet forum posts that praised the company at the expense of rivals including its home-country handset competitor HTC.

On Thursday, Taiwan's Fair Trade Commission said it was punishing Samsung with a $341,037 fine for deceiving consumers with its marketing activities.

Taiwan's FTC began investigating the matter in April after a local site, called TaiwanSamsungLeaks, accused the company of fabricating negative user comments on competing products. To back its claims, the site released documents from a Samsung-hired marketing firm that catalogued the different postings on Taiwan's gadget forums.

While it is a clear breach of our Trade Practices Act to post information that is false and misleading, what the Taiwanese FTC relied on was not that anything in the posts was misleading, but that the amount of activity was misleading in that it might lead someone to believe that the support for Samsung products was a genuine reflection of their reputation in the market.

If the posters had declared they were being paid by Samsung, then the situation would have been different.

So essentially it is an issue of an undeclared conflict of interest mainfesting itself through a poster pretending to be someone they weren't - a disinterested member of the public.

This type of activity is very common online in Australian politics, which is not subject to the Trade Practices Act, so it is a reasonable bet that some corporates in the online space are doing it too. Could be just a matter of time before a case like this surfaces in Australia.

H/T Shelley Palmer

Written by Graham Young on Tuesday, 29 October 2013

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