The decision was made by Australia’s Advertising Standards Board regarding the Facebook page of vodka brand Smirnoff, according to The Firm magazine. The ruling stated that all posts made on the page must comply with advertising laws – potentially unravelling the social web site’s financial model.

Global implications

The decision also has global implications, as comments made in other countries can be viewed in Australia. Companies could now be held legally responsible if they allow false claims or racist or sexist language to appear on their page.
Experts suggest the ruling could be just the beginning of legal action, with similar rulings set to follow across the globe. Chris Watson, a partner at London-based law firm CMS Cameron McKenna, said: ‘There used to be no downside to advertising on Facebook. Now the free lunch is over and reality has intervened. Companies have to take responsibility.’