Reflections on our export community

The year just past will not go down in history as the most satisfying for Australia’s export community, many of whom are our members and friends. 

While skills development is and always will form the cornerstone of what we do, we have this year played an increasing role in getting the message to Government on the plight of our non resources based exporters. While on the surface it may not be apparent, the message, we believe, is getting through. Our task in 2012 is to “maintain the rage” and simply not accept the argument that Australia’s future is based on the resources sector alone, but on a well balanced portfolio of exports which includes manufacturing, food and services to name just a few. With your continued support we will continue to hammer this message home and to take the strongest stance possible on reminding Government that continued additional taxes will even further erode our international competitiveness.

We would like to take this opportunity to thank all who participated in the 2011 Export Awards across Australia and congratulate those who won. The awards program is a wonderful vehicle for exporting companies to review their export strategies, reward their hard working staff and measure their performance against their peers. It would be remiss of me not to make mention of the six outstanding people who become Australian Export Heroes this year. Their extraordinary contribution to building Australia’s international business capability and our export culture was recognised at Government House in Queensland in June.

As a sound believer in the value of collaboration, the Institute has worked closely this year with a whole range of organisations including Universities, associations and government agencies. We would like to thank all our partners and sponsors for their support this year and we look forward to working with you in 2012 to play our role in driving Australia’s export performance. Especially though, we thank our members and friends for not only their support but their wise counsel, which is often drawn upon. It’s greatly appreciated. 

Although next year will once again be tough, the Institute has on the agenda some exciting initiatives a number of which will be revealed quite early in the year. All these initiatives are aimed at building capability and performance in International Trade. We wish you all a safe and happy festive season and look forward to attacking the challenges of 2012 with your support. And please remember, if you are a member and you have issues you would like taken to government or queries relating to the process of International Trade please send them to us; it is what we are here for.
Ian Murray- Executive Director, Australian Institute of Export

Export in 2011/2012

As 2011 draws to close, it is interesting to reflect on how the year shaped up for Australian Exporters. 

Even though our balance of trade is looking positive, it has been the resources sector making the running on export growth.

With the high AUD and events such as the devastation in Japan, cyclones in Queensland and floods in Victoria, new problems emerging in Europe, and the US still trying to rebuild from the GFC, it has not been a great year for many exporters.

Thank heavens for Asia!  The continuing growth to our north has kept many exporters in business and has had to make up for lower demand in established markets.

And for 2012?  Well the signals are that the problems in Europe will persist and the USA is still some time away from recovery.

So again Asia and sectors in South America, plus new markets in Africa will form the vanguard for our 2012 opportunities. Perhaps a FTA with South Korea would be a great way to start the New Year, along with progress on the Trans Pacific Partnership.

It is difficult to predict what might happen with the AUD, but it will require strategies for exporters, so as to avoid rate volatility playing havoc with export pricing.

With the Government focused on returning to surplus, there won’t be much in the way of financial support for exporters outside the EMDG scheme.

Mining and Agriculture should be strong sectors for 2012, and for others it will be finding a niche and working hard at it. Australian Exporters have proven they are strong adapters, and they have a capacity to find opportunities in the most unlikely places.  The big risk seems to be contagion from Europe impacting the domestic economy.

So with things potentially a bit slow domestically next year, export can still be the road to growth. It will require though a realistic assessment of the risk/reward of certain markets to ensure a positive return. As the (purported) old Chinese saying goes, “may you live in interesting times” and 2012 is certainly shaping up as interesting. 

Peter Mace
General Manager
Australian Institute of Export

It’s a lovely planet

In the early days of Lonely Planet, founder Tony Wheeler quickly learnt the importance of building a brand and protecting his valuable intellectual property (IP) overseas.

The Lonely Planet brand was originally created by Tony and Maureen on a side table in a hotel room. Tony came up with the name while singing the song ‘Space Captain’ written by Matthew Moore. He sung the words ‘Once while travelling across the sky this lonely planet caught my eye’. The actual words are ‘lovely planet’ but Tony preferred his version of the lyrics and from this humble beginning Lonely Planet is now one of the world’s most respected and valuable travel trade marks.

To maintain the integrity and value of the Lonely Planet brand Tony and his team played an active role in the management their IP by monitoring the market for imitators and taking swift action against infringers. This was part of the reason the brand was so attractive to BBC Worldwide who purchased the remaining 25 per cent stake in February 2011 for $67 million.

It was during the carefree days of their youth in the 1970s that Maureen and Tony Wheeler learned that IP ownership arrangements with third parties need to be clearly defined - after the first profits of their tiny company were eaten away by authors who had retained copyright ownership over their books.

‘We realised almost immediately that this was not sustainable business model. It became very clear to us how important it was to control and manage our IP.  Clearly defining the IP ownership arrangements with any third parties or suppliers involved in the business – before they started work was something we started doing very seriously from that point.

We started paying writers to go and research and write for us, but ensured that the IP belonged to Lonely Planet’.

‘This was the thing that made Lonely Planet a success story – the integrating an IP management strategy into our overall business and exporting plan. Controlling your IP rights is very important’, Tony said.

Tony still continues to travel and write for the Lonely Planet and recently gave a presentation at IP Australia on the company’s history—how he and Maureen grew a small Melbourne business in the 1970s into what is now internationally recognised as the global ‘Bible’ for tourists – Watch it now at IP Australia’s YouTube Channel.

For more information on protecting your IP abroad visit www.ipaustralia.gov.au 

Brazil: the new frontier

Having worked in some difficult business locations I know the value of having somebody do some good upfront research which identifies not only the market dynamics but importantly the business culture or business philosophy likely to be encountered in a complex market.

Brazil, because it’s one of the world’s fastest growing markets, promises wonderful opportunities for Australian exporters but in saying that, it remains a very complex place in which to do business, with lots of unknown traps for the inexperienced exporter.

For five lucky Australian Institute of Export members upfront research into the Brazilian market is about to be the order of the day. In February 2012 five teams of students from the University of Sydney will be heading for Brazil to undertake a two week intense business project as part of their Masters’ degree. Each team comprising up to four final year students in Master of Management, Master of Marketing or Commerce will work with an Australian export company that has identified Brazil as a potential export opportunity.

From a university perspective the objective of the project is to provide students with real life business experience along with the opportunity to prove skills within a professional environment. From a business perspective the assignment will provide the five participating companies with a skilled resource to undertake research and provide solutions/outcomes by way of a professional consulting.

All that sounds pretty straight forward and exciting, but as Academic Advisor Professor Sid Grey puts it, “it won’t be a walk in the park or two weeks taking in the sights of Rio, it’s going to be full on in Brazil and during the lead up which essentially starts now”. Briefings in fact started this week. These briefings will be followed by visits by the students to all the companies involved, meeting  the key people and getting a thorough understanding of the company, the products, the competitive advantage and of course their financial ability to meet the likely demands of building a business in Brazil. At the end of the project, students will be required to deliver a presentation and submit a report for assessment.

As one would expect there was strong interest from Australian companies wanting to be involved. Submissions were assessed by key University personnel who will be involved in supervising the project from start to finish. On the final list is a really diverse range of companies all with great potential and all providing the students with a wide range of challenges. The five Institute members involved are, Flip Screen Australia, a Wagga Wagga based company in industrial screening, whose key interest is the mining sector.  Well known and highly successful coffee company from Castle Hill in Sydney, Gloria Jeans Coffees International, award winning and well know wine company McWilliams Wines, Taree based commercial boat builder Stebercraft, who design and build craft for the police, armed services and emergency services and surf and streetwear company Zanerobe.

What is really pleasing about this project is the value it adds to both parties. Students will get enormous benefit from working on real projects and delivering business outcomes. The companies involved will naturally receive professional research and between them I’m sure strong relationships will evolve.

And given the success of the Brazil project the University of Sydney is planning similar projects through the Australian Institute of Export in China and India in 2012.

With all the difficulties being faced by exporters, cut backs by Government for programs that drive our export growth, it’s really refreshing to see this sort of initiative from Sydney Uni. We wish Sid and his team a safe and successful trip to Brazil and perhaps we will see a few export winners a little further down the track.

Author:

Ian Murray

Executive Director

Australian Institute of Export

ianmurray@aiex.com.au

www.aiex.com.au

 

Business Success in the US – Blog #3 Changing Channels: US Television retailing is not about steak knives!

Like me, I bet many of you grew up being bombarded by offers from an eclectic mix of characters selling ‘high quality’ items on TV. To seal the deal most offered some sort of sweetener - My favourite would have to be the old chestnut, a set of steak knives.

I will be the first to admit that I brought this perception with me when I moved to the States about 6 years ago ..... How wrong I was! Television retailing is big business in the US with current estimates putting annual turnover at somewhere in the vicinity of US$9 billion.

The largest player, QVC, reaches over 90 million cable households and broadcasts ‘live’ 24 hours a day, 364 days a year! It has built its business on promoting big brands (e.g Dell, Birkenstock, Bose, Toshiba, Nintendo) plus establishing new (high value) ones. QVC has over 7 million active customers and takes anywhere from 5000 to 15000 orders per hour. Whats more it also ranks #7 in the US for online sales which now accounts for over 30% of its business.

Now to the crux of the matter - How can I successfully sell my products to a US television retailer? Well, apart from being a very lucrative channel it is also one of the most competitive (for obvious reasons) and in my experience you should look to one of the many manufacturers’ representatives that work with the likes of QVC and HSN. But to get you started, here are some basic questions you need to answer:

•   Product, product, product: Television retailers buy products they feel are unique and will sell well. Due to limited air time they must be convinced that your product will perform better than current offerings (or the competition). QA/QC checks are also rigorous to avoid costly returns.

•   What are your best selling SKUs? Are these currently available in the US? Its possible that the retailer may want a unique offering that can only be purchased on their channel and many carry Private Label brands.

•   Can you demonstrate your product’s unique product attributes on air? Seeing is believing and definitely leads to higher sales.

•   Beware of dodgy brothers: There are lots of companies and individuals out there in the ‘infomercial’ business who promise the world but are only after a quick buck.

Products of Interest

QVC carries a broad assortment of merchandise. In general, items with broader appeal will sell better that niche items. However, there are many, many exceptions.  Some of the top categories on QVC include:

Jewelry: Either with noteworthy designers or unique construction or story

Beauty: Color, skincare, haircare, nails, tooth whitening

Consumer Electronics: Brands, new technologies, problem solvers

Kitchen: Gadgets, electrics, tabletop, cookware

Food: Center of plate, regional, healthy snacks

Garden/Outdoor: Tools, grilling, plants

Other: Cleaning, home décor, watches, gifts, health & fitness, apparel & accessories

For more information a fact sheet on ‘Selling Successfully to QVC’ is available on request from Access USA.

Quote: “Television is an invention that permits you to be entertained in your living room by people you wouldn't have in your home.” David Frost

Author:

Ian Smith

Chief Executive Officer

Access USA Pty Ltd

ian@accessusa.com.au

www.accessusa.com.au

Indonesia to fully implement the ASEAN - Australia New Zealand Free Trade Area (AANZFTA)

If HS2012 was not an exciting enough start to 2012, it has now been announced that Indonesia has finally taken all steps to fully implement the AANZFTA with effect from 10 January 2012.
This will allow for full implementation of the AANZFTA by all contracting parties and will, hopefully, further enhance our trade with the region.

Doubtlessly this will start a mad scramble for appropriate Certificates of Origin and softwear upgrades for reporting Import and Export Declarations to claim preferential treatment for goods of Australian and Indonesian origin as provided for in the AANZFTA.

There will also be the usual move to schedule the transport of qualifying goods to ensure that they secure the full benefit of preferential access. There were issues on this for both the AUSFTA and the earlier stages of the AANZFTA.

As always we would be delighted to assist and time spent preparing in advance of the “go” date will be well rewarded.

Presumably, the Australian Customs and Border Protection Service will be issuing a Notice or Notices regarding this development.

I should also add that amendments to the Singapore-Australia Free Trade Agreement (SAFTA) came into force on 2 September 2011.

Contact: Andrew Hudson, Melbourne +61 3 8602 9231 ahudson@hunthunt.com.au

© Hunt & Hunt 2011 Disclaimer: The information contained in this e-alert is not advice and should not be relied upon as legal advice. Hunt & Hunt recommends that if you have a matter that is legal, or has legal implications, you consult with your legal adviser. If you no longer wish to receive this e-alert or any other publication from Hunt & Hunt, please email us at unsubscribe@hunthunt.com.au

High hopes for a Trans-Pacific Partnership

Recent discussions on Australia’s Free Trade Agenda have come to include reference to the conclusion of the “Trans-PacificPartnership Agreement” (“TPP”).

The origins of the TPP can be found in the earlier Trans-Pacific Strategic Economic Partnership Agreement (described as the “P4”) between Brunei Darussalam, Chile, New Zealand and Singapore which entered into force in 2006.

Subsequently, the original “P4” parties together with Australia, Peru, the US, Vietnam and Malaysia have joined to consider the establishment of the TPP. The Australian Federal Government has publicly described the TPP as the Federal Government’s highest regional trade negotiating priority.

Wider international interest in the TPP has increased at the same time as an increase in interest from the United States which now perceives the TPP as a means to support and expand the US economy as well as the regional economy. Broader US support for trade liberalisation can be seen from the very recent Congressional approval for other US Free Trade Agreements which, while negotiated and completed some years ago, have only recently been passed by the US Congress with approval for implementation.

From an Australian perspective, it is hoped that the TPP would build on existing liberalisation through bilateral Free Trade Agreements (“FTA”) with New Zealand, Singapore, Thailand and Chile as well as the regional FTA with the ASEAN nations. There is also a wider hope that the TPP could be a precursor to a broader APEC free trade zone.

The parties to the TPP have been engaged in extensive negotiation and prior to the current meeting of APEC leaders, the parties negotiating the TPP released a statement to the effect that they had agreed, in principle, to the content of the TPP.

The release identified a number of areas where agreement in principle had been reached to allow completion of the TPP. These included the following (in general):

• Comprehensive market access (ie. reductions in tariffs and other non-tariff barriers).  
• Regional Agreement.  
•  “Cross-cutting” trade issues (including regulatory coherence, competitiveness and business facilitation, SME assistance, customs clearance and economic development). 
• To assist new trade challenges.   
• That the TPP should be a “living” agreement.

These are all largely consistent to the outcomes of any FTA (whether bilateral or regional). This reference to SME assistance is welcome as small and medium sized businesses can often “miss out” on FTA benefits through lack of resources or complexity in implementation of the FTA.

It is also reported that Mexico, Japan and South Korea are being approached to join the TPP. However, at this stage, the PRC does not appear to be engaged and it has expressed concerns as to its apparent specific exclusion from negotiations. Clearly, there is significant merit in expanding the TPP to additional countries. However, there is always the fear that the broader the base for an agreement, the more difficult it would be to secure significant concessions from that broader group of countries.

While the spread of regional trade liberalisation is to be supported, the merits of any agreement would depend upon the precise terms of the TPP, any specific exceptions and the degree to which it represents an improvement on existing FTA. It also needs to be remembered that any agreement such as the TPP must first be finalised and agreed between negotiating countries and it then needs to be approved by and implemented in each of those negotiating countries. That can all take time and may lead to further compromises. Given the proposed timeframes (which suggests the TPP could be completed by the end of 2012), the TPP would also need to secure bilateral political support in all negotiating countries as future changes to the Governments of negotiating countries could have adverse outcomes for the completion and comprehensive adoption of the TPP.

To date, we have also yet to see any developments on the announcement of completion of an Australian FTA with Korea. Recent comments from the Federal Government suggested that an announcement of completion of an FTA with Korea would be made during the course of November. As always, we will keep you informed of developments and assist with the implementation of the TPP or any other FTA.

Contact: Andrew Hudson, Hunt & Hunt,  Melbourne +61 3 8602 9231 ahudson@hunthunt.com.au

 

Get Yourself Published!

Did you know that you too you could publish your articles on our blog? The Australian Institute of Export team offers you the opportunity to publish your own articles online!

Your article will be published on the official website of the Australian Institute of Export , on the Australian Export Forum, and other internet sources used by our organisation. You will receive an official Certification of your publications by the Australian Institute of Export.

What can you write about?

• Country updates: provide up-to-date information about the opportunities to do business in a specific country, and the current trading relations with Australia.

• Company case study: describe the success story of a specific company you know about. Many businesses succeeded in difficult times, and we would love to hear what has been contributing to those successes. (The company will need to approve the copy).

• International Trade: discuss theory-based models related to current international trade issues or news concerning Australia.

• International Business: describe practical aspects and practices or discuss theories of international business. This could also include global supply chain and logistic topics.

• International Financial Management: provide information about exchange rate management, risk management, credit arrangements, insurances policies and so on.

What should your article look like?

• Keep it short: you article should have no more than 3,000 words

• Do not hesitate to express your own opinion

• Referencing your work is essential, and plagiarism is not permitted

The Australian Institute of Export team will be happy to assist you by reviewing and providing guidelines for your articles. We are a friendly team happy to work with students and teaching staff.

 

If you wish to send us your publications or just want to have some more information,

Please contact Lisa at info@aiex.com.au .

The world wide web of laws entangling Social Media

The nature of communication and the interaction between people is drastically evolving. Technology is dictating the way we communicate with each other, the way we do business, and the way products and services are marketed.  We are moving towards a world where everything is connected through the internet, specifically via social media. The traditional methods of communication are slowly vanishing and more and more people and businesses are using social networking sites such as Facebook, Twitter and LinkedIn to keep in touch and market their businesses, services and products.

We have a strong desire to obtain information and news instantaneously as it is released or happens and the capability of being able to communicate via our smartphones or Tablet PC’s has only increased this hunger.  Figures released late last year by Facebook show there are currently 10 million Australian users of Facebook¹  and the use of Twitter and LinkedIn is increasing.  If the Facebook community was a country, it would be the third most populated country with more than 800,000,000 active users².

What is Social Media?

The term ‘social media’ has rapidly increased over the last few years. The term refers to the use of web-based and mobile technologies to turn communication into an interactive dialogue. Academics have defined social media as “a group of Internet-based applications that build on the ideological and technological foundations………that allow the creation and exchange of user-generated content.”³ Social media is a group of new kinds of online media that allows social communication, as a superset beyond more conventional notions of social communication. Anthony Mayfield in his ebook “What is social media?”⁴  says the new kinds of online media share most of the following characteristics:

Participation: everyone who is interested has the opportunity to contribute and provide feedback on an issue through social media. The line between media and audience is blurred.

Openness: the majority of social media services encourage feedback and contribution allowing users to vote, comment and share information. Any form of barrier prohibiting access and the sharing of content is non-existent. Very little is a secret anymore. The results of sporting events, awards ceremonies, the death of a celebrity (at its peak there were over 6,000 tweets per second recorded on Twitter in response to the announcement of the death of Apple co-founder Steve Jobs⁵) or the occurrence of a natural disaster are able to be broadcasted to the whole world within seconds.

Conversation: social media is seen as a conversation between two, three or more users opposed to traditional media which is generally a one-way broadcast.

Community: people that share a common interest (such as a sporting team, particular film genre or political view) are able to communicate effectively and instantaneously as soon as something occurs.

Connectedness: most kinds of social media allow for links to other websites, video material, resources and people creating a web of connectivity between users and content.⁶

There are various forms of social media and there are always new forms of social media being developed hoping to be the next big thing. The main forms of social media are:

• Social networks (Facebook, MySpace, Google+);
• Blogs;
• Wikis (Wikipedia, Wikinews, Geo-wiki, GeoNames);
• Podcasts;
• Forums;
• Content communities (YouTube, Flickr, wesabe);
• Microblogging (Twitter, Posterous, Dailybooth);
• Virtual game worlds (World of Warcraft); and 
• Virtual social worlds (Second Life).

Using Social Media to Advertise

We have seen in recent times a number of innovative ways in which social media has been used by businesses to promote their products and services, but this must be done in a way which ensures that representations made in relation to the products or services of a business are accurate.  This includes information relating to price, quality and performance.

Material advertised through social media must be clearly identifiable and be easily distinguished from any other content, such as terms and conditions and independent product reviews.  Businesses should also monitor their social media pages to ensure testimonials, feedback or comments from third parties do not contravene any laws.  A recent decision by the Federal Court of Australia highlights how businesses may be liable for misleading and deceptive statements made on their social networking sites by third parties.  In Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2) the court found that the company and its former director were liable for testimonials posted on its Facebook and Twitter pages by clients, even though the company itself did not post the testimonials. The Court found that the company had become the “publisher” of the testimonials because it knew of the posts and chose not to remove them.
 

Complex Web of Laws

There are generally three schools of thought regarding social media law:

1. those that believe that social media law does exist, but it is made up of a complex web of laws that are generally misunderstood in the online environment;
2. those that deny that social media law exists; and
3. others who are of the misconceived perception that a social media law does not exist in cyberspace.

In a nutshell, the laws that apply in the real world also apply in cyberspace.

Although there are a number of benefits that social media brings to both personal usage and business purposes, there are certain risks and implications that can arise. While the law has not entirely caught up with technology and there is no specific piece of legislation that regulates social media sites and the use of social media, it is important to keep in mind that what you do with social media can have real world legal consequences. 

In examining the law and how it applies to social media, it is difficult to pinpoint one particular area of the law that social media applies to.  It spans a number of areas of the law because issues cross social boundaries and business use, employers and employees, contract and tort and common law and statute.  The nature of the jurisdiction and deciphering which law applies are key issues to be considered as most of the more popular social networking sites are based overseas, mainly in the United States.

At this stage there has not been any discussion of legislation specifically tailored towards the regulation of social media sites and the use of social media but it isn’t hard to imagine a law in the future that could regulate social media. The basis for a specific social media law would arise from laws that currently exist. The following are some of the areas of law that currently govern the way we interact and do business through various social networking sites.

Privacy

If a business stores contact details and personal information about its customers, the Privacy Act 1988 (Cth) requires the business to make the customer aware of what personal information is being collected, how it is to be handled and give them the opportunity to “opt-out” from receiving any marketing material from the business.

However, if your business is considered a ‘small business’ meaning it has an annual turnover of $3 million or less, then it does not need to comply with the Privacy Act unless:

• it is a health service provider;
• trading in personal information;
• related to a larger business;
• a contractor that provides services under a Commonwealth contract;
• a reporting entity for the purpose of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).

Despite the above examples as exemptions from the Privacy Act, there is a general perception in the wider community that when a business collects and stores personal information via the internet that it should do so pursuant to the Privacy Act.  Even if your business does not need to comply with the Privacy Act, there is always the risk of your business database being hacked into and customer personal information being stolen. It is good business practice to put in place some procedures that comply with the Privacy Act regarding the collection and storage of personal information in an effort to defend against any potential cyber attack.

Spam and Commercial Messages

Spam is defined under the Spam Act 2003 (Cth) as “unsolicited commercial electronic messages”.

Commercial electronic messages such as email, instant messaging, SMS, MMS are an important tool for businesses as they are an easy and cost-effective way for a business to communicate with its employees and customers.

The Spam Act applies to any commercial electronic message with an Australian link, regardless of the size of the business that sent the message. 

The Spam Act also applies to emails sent by a business to anonymous email addresses, where the identity of the individual cannot be reasonably ascertained.  This principle would apply when a business purchases a list of email addresses for marketing purposes.

Depending on what other information is held, an anonymous email address may or may not be considered as ‘personal information’ under the Privacy Act.  Information is deemed ‘personal information’ if the business can identify or reasonably ascertain the identity of the individual to whom it relates.

If a commercial electronic message is sent without the use of personal information, then the Privacy Act would not apply, although the Spam Act may still apply.  Alternatively, if a sender is deemed exempt under the Spam Act (such as religious organisations, registered charities, political parties and educational institutions), the sender must still comply with the Privacy Act if the direct marketing message contains personal information.

When sending a commercial electronic message, the sender must comply with the Spam Act to ensure the commercial electronic message:

• is sent with the consent of the recipient;
• identifies the sender;
• allows the recipient to unsubscribe from receiving further commercial electronic messages.

Even where messages are ‘exempt’, they must still identify the sender.

Intellectual Property

Businesses need to be familiar with copyright laws whenever they develop social media content.  The copyright in social media content developed by a business or its employees belongs to the business.  However, posting a comment, image or video file without the permission of the author could be a breach of copyright. 

In certain circumstances, Facebook status updates, the posting of links/photos/logos or the re-tweeting of another’s original work can amount to breaches of copyright or trademark infringement.

Businesses need to be mindful of the terms of use of social networking sites such as Facebook and Twitter when posting photos, logos or comments on these sites.  Facebook and Twitter’s terms of use clearly state that for content that is covered by intellectual property rights (photos, logos, videos etc.) the user grants Facebook and Twitter a worldwide non-exclusive, royalty-free license (with the right to sub-license) to, amongst other things, use, re-produce, copy, publish and transmit any IP content that you submit, post or display through your account.  Facebook’s terms of use provide that “the license ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.”  Twitter’s terms of use do not contain a period on which the license ends.

Businesses need to be mindful that even though they do not intend to establish a Facebook or Twitter account, it is very easy for a person to create an account using the businesses name or brand causing confusion.  Even if a business does not intend to use a social networking site it might be worthwhile to create an account to prevent another person creating an account using the name of your business or logo.

Another issue that is creating confusion for businesses is the creation of millions of Facebook community pages by Facebook.  Many businesses have been angered by the creation of the community pages as they had invested time and money into creating their official Facebook page for their business. The purpose of a Facebook community page is to let the user connect with others who share similar interests. These pages are auto-generated from users ‘likes and interests’ and ‘work and education’ sections of a users personal profile and depending on how users have described their place of employment or education, there could be more than one Facebook community page for a particular company or educational institution. Depending on the subject matter of each community page, content (including that page photo) is automatically taken from Wikipedia.  All other content is auto-populated from wall posts and status updates made by any Facebook user containing the keywords of the community page. Unfortunately, there are no administrators monitoring community pages meaning businesses have no control over what shows up on the page.

Businesses need to be vigilant that social networking sites could in fact be creating pages that contain content about their business that might not be favourable.

Defamation

Users of social media, whether it be for business or personal use, must recognise that posting content to a social media site is the same as publishing that material via traditional forms of media.  Posting or tweeting a slanderous comment against another person via a networking site can in fact be a lot more dangerous than a defamatory comment appearing in the local newspaper as there is little control over how far and wide that material could spread and the amount of damage it could cause.  Traditionally, a defamatory comment could be retracted via publishing a suitable retraction in the local newspaper, however, given the speed in which information is updated and moves through cyberspace, this would seem near impossible, especially if it has gone viral.

Even though action can be taken against the writer, the difficult part is ascertaining who the actual writer of the defamatory comments is as most people post comments under an alias. One way is to search the IP address of the writer of the defamatory comments, but technology has advanced allowing posters of defamatory comments to disguise their IP addresses.

In the Workplace

Businesses are increasingly relying on social media to promote their business. With this comes the increased use of social media in the workplace. There are an increasing number of businesses that are restricting their employees access to social media sites such as Facebook and Twitter.  However, a number of businesses are reluctant to restrict access as they hope allowing employee access to these sites could increase promotion of their business or assist with the recruitment of new staff.

Employers need to be mindful that they must provide clear guidance to their employees of their businesses social media policy to ensure employees are aware of their social media responsibilities in the workplace.  There have also been cases where the inappropriate use of social media against co-workers (such as harassment) outside of work hours has resulted in employees being dismissed for serious misconduct.

Recent decisions by Fair Work Australia have again confirmed that proof of excessive use or the inappropriate use of social media during or outside of work hours may constitute a valid reason for termination of employment.

Employers have used Facebook profiles as evidence in workers compensation cases and to dismiss rogue employees who have continually failed to show up for work without any apparent reason.

Conclusion

The growing impact that social media is having on our lives and on the way we do business should make us all a lot more vigilant and cautious of the possible legal consequences that could arise. Some points that you should consider when using social media:

• even though there isn’t a dedicated piece of legislation known as ‘the Social Media Act’ there are legal consequences from the misuse of social media;
• ensure that you provide customers the opportunity to “opt-out” from receiving any online marketing material from the business;
• put in place procedures that comply with the Privacy Act regarding the collection and storage of personal information to defend against any potential cyber attack;
• make sure posting a comment, image or video file is not a breach of copyright;
• make sure a post or tweet via a networking site is not a slanderous comment against another person;
• be mindful that social networking sites such as Facebook and Twitter can use any content that you post on your Facebook page or Twitter account; and
• implement a social media policy in the workplace to ensure employees are aware of their social media responsibilities in the workplace.

If you have any questions on the possible legal ramifications that social media might have on your business, please contact Hunt and Hunt.

Contact:

John Kell Sydney (City)	+61 2 9391 3163	jkell@hunthunt.com.au
Catherine Logan, Sydney (City)	+61 2 9391 3267	clogan@hunthunt.com.au
Harold O’ Brien (North Ryde)	+61 2 9804 5753	hobrien@hunthunt.com.au
Tony Raunic, Melbourne	+61 3 8602 9266	traunic@hunthunt.com.au
Ashley Pelman, Melbourne	+61 3 8602 9213	apelman@hunthunt.com.au
Robin Lonergan, Brisbane	+61 7 3292 9710	rlonergan@macrossans.com.au
Rick Harley, Adelaide	+61 8 8414 3373	rharley@hunthunt.com.au
Darren Miller, Perth	+61 8 9488 1300	darren.miller@culshawmiller.com.au
Antony Logan, Hobart	+61 3 6210 6213	alogan@hunttas.com.au
Chris Osborne, Darwin	+61 8 8924 2600	cosborne@huntnt.com.au

  

 

 John Kell

 

 

John Kell is a Partner at national law firm Hunt & Hunt. He provides a wide range of commercial advice to clients in relation to joint venture arrangements, mergers and acquisitions, contract preparations and negotiations and compliance. John also provides advice to Australian companies doing business overseas, especially in China, and foreign companies entering Australia including set-up, exporting and sourcing goods and materials.

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1 "10 million Aussies in love with Facebook", Lee, Julian, Sydney Morning Herald, 10 December 2010.

2 Facebook -www.facebook.com/press/info.php?statistics

3 "Users of the world, unite! The challenges and opportunities of Social Media", Kaplan, Andreas M.; Michael Haenlein (2010).

4 "What is social media?", Mayfield, Anthony, V1.4 – Updated 01.08.08, icrossing.co.uk/ebooks.

5 "Tweets about Steve Jobs spike but don't break Twitter peak record", Sullivan, Danny, Search Engine Land, 6 October 2011, http://searchengineland.com/tweets-about-steve-jobs-spike-but-dont-break-twitter-record-96048

6"What is social media?", Mayfield, Anthony, V1.4 – Updated 01.08.08, icrossing.co.uk/ebooks.