reputation & liability in a viral world

Technology & Risks:

Reputation & liability in a “viral” world

Guy Burgess - guy.burgess@clendons.co.nzClendons Lawyers

ANZIIF Conference3 April 2014

Reputation & LiabilityGuy Burgess, Clendons

What is “viral”?

• OED: viral (adjective). (Of an

image, video, piece of information, etc.) circulated rapidly and widely from one Internet user to another

Reputation & LiabilityGuy Burgess, Clendons

Reputation & LiabilityGuy Burgess, Clendons

Reputation & LiabilityGuy Burgess, Clendons

Reputation & LiabilityGuy Burgess, Clendons

Reputation & LiabilityGuy Burgess, Clendons

Reputation & LiabilityGuy Burgess, Clendons

Reputation & LiabilityGuy Burgess, Clendons

The downsides of viral

• Cyber bullying

• Loss of privacy / privacy breaches

• Reputational harm (attacks and self-inflicted)

• Commercial & legal consequences

Reputation & LiabilityGuy Burgess, Clendons

Cyber bullying

• Over 50% of 12-15 year olds have social networking profiles

• NetSafe NZ receives about 60 cyber-bullying complaints a week

• Doesn’t just affect kids−Employer obligations too

• New law to address harmful online activities

Reputation & LiabilityGuy Burgess, Clendons

Harmful Digital Communications Bill

• Expected to pass this year

• “Communication principles”−Must not to send or post “harmful

messages”−Must not disclose “sensitive personal

facts” about an individual−Must not make “false allegations”−Must not encourage harm or suicide

• Aimed at personal harm / cyber-bullying but has wider implications

Reputation & LiabilityGuy Burgess, Clendons

HDC Bill: Process• Complaint-driven

• Approved agencies (e.g. NetSafe) take action in the first instance

• “Notice and take-down” procedure for ISPs and “content hosts”

• Courts can make orders against persons and organisations / companies− Take down content− Post correction

• Fines of up to $20,000 for non-compliance

• Doesn’t replace other laws (eg defamation)

Reputation & LiabilityGuy Burgess, Clendons

HDC Bill: Business Implications

• Understand the new regime

• Process for handling complaints

• Consider social media issues:−Corporate Facebook page comments−Corporate Twitter interactions−Company message boards

• Reputational damage

Reputation & LiabilityGuy Burgess, Clendons

Privacy• A major “viral” issue at the moment

• More & more information being collected & shared− Who has it?− What are they doing with it?− How is it being used / shared?

• Tied up with issues of:− Identity− Personal information (“profile”)− Reputation− Monitoring / “spying”− Data loss events− Law enforcement

Reputation & LiabilityGuy Burgess, Clendons

Privacy

Reputation & LiabilityGuy Burgess, Clendons

Privacy

Reputation & LiabilityGuy Burgess, Clendons

Privacy Act – business obligations

• Every business is subject to Privacy Act

• Protects “personal information”

• “Privacy principles”− Must not collect unless necessary− Must make individual aware of collection− Must have safeguards against loss / misuse /

disclosure

• Privacy Act requests

• Complaint process− Privacy Commissioner− Human Rights Review Tribunal− Fines or other sanctions

• Serious reputational & liability consequences

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches - EQC

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches - EQC

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches - EQC

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches - EQC

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches - EQC

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches - EQC

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches - ANZ

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches by theft

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches by theft

Reputation & LiabilityGuy Burgess, Clendons

Privacy breaches by theft

Reputation & LiabilityGuy Burgess, Clendons

Managing privacy breaches

• Prevention is key−Malicious vs accidental− IT security− Policies and training

• Mandatory notification on its way

• Appropriate response− Technical− Legal− Public relations

Reputation & LiabilityGuy Burgess, Clendons

REPUTATION

• More important than ever thanks to the internet

• Information goes viral

• Information moves fast & freely

• Information persists

• More scope for reputational damage

Reputation & LiabilityGuy Burgess, Clendons

Privacy Identity Reputation

Reputation & LiabilityGuy Burgess, Clendons

Privacy Identity Reputation

Reputation & LiabilityGuy Burgess, Clendons

Privacy Identity Reputation

Reputation & LiabilityGuy Burgess, Clendons

Self-inflicted reputational harm

Reputation & LiabilityGuy Burgess, Clendons

Self-inflicted reputational harm

Reputation & LiabilityGuy Burgess, Clendons

Self-inflicted reputational harm

Reputation & LiabilityGuy Burgess, Clendons

Self-inflicted reputational harm

Reputation & LiabilityGuy Burgess, Clendons

Self-inflicted reputational harm

Reputation & LiabilityGuy Burgess, Clendons

Self-inflicted reputational harm

Reputation & LiabilityGuy Burgess, Clendons

Avoiding pitfalls

• Social media policy

• Acceptable use policy

• Training / education− Privacy issues− Intellectual property issues− Public relations

• Don’t do dumb things online

• Never send anything that would be damaging if it went viral

Reputation & LiabilityGuy Burgess, Clendons

Reputational attacks

• Using social media & “viral” effects to affect someone’s reputation− For commercial purposes− For political purposes− Just for fun

• Traditionally the realm of defamation law

• But it’s much more complex today

Reputation & LiabilityGuy Burgess, Clendons

Reputational attacks

• UGotPosted.com “revenge porn” racket

Reputation & LiabilityGuy Burgess, Clendons

On a lighter note…

Reputation & LiabilityGuy Burgess, Clendons

On a lighter note…

Reputation & LiabilityGuy Burgess, Clendons

On a lighter note…

Reputation & LiabilityGuy Burgess, Clendons

Social media backlash

• Burger King

• Owns trade mark “Whopper”

• Small Australian takeaway shop selling “Wambie Whopper” for 20 years

• 2013: Burger King demanded they cease using the term “whopper”

Reputation & LiabilityGuy Burgess, Clendons

Social media backlash

Reputation & LiabilityGuy Burgess, Clendons

Consider social media risks• Is the legal route the best option?

• Understand your target and appreciate that a lawyer’s letter may “go viral”

• Try to understand how the allegations will come across

• Assume the worst – your letter will go viral

• May also face “guerilla” tactics

• Consider alternatives – sometimes, might be best to cut losses and move on

Reputation & LiabilityGuy Burgess, Clendons

Smart social media awareness

• Pizza Hut registered AdWords for “hell pizza”

• Users were shown advertisement saying “Don’t go to Hell Pizza – pizzahut.co.nz”

• Hell Pizza did not take legal action but instead subverted it to their own advantage

Reputation & LiabilityGuy Burgess, Clendons

Reputation & LiabilityGuy Burgess, Clendons

Riding on another’s reputation

• Use of a competitor’s name / trademark as AdWords

• High-profile cases in US, EU, UK, Australia

• Legally risky

Reputation & LiabilityGuy Burgess, Clendons

InterCity v Nakedbus

• Nakedbus registered adwords for “inter city”

Reputation & LiabilityGuy Burgess, Clendons

InterCity v Nakedbus• “Intercity” is a trade mark of InterCity bus company

• High Court held the Nakedbus’s use of the term was:− Trade mark infringement (Trade Marks Act)− Misleading & deceptive conduct (Fair Trading Act)

• Purchasing another person’s trade mark as an adword is “use” of that trade mark:− “I have no doubt that Nakedbus was, when it purchased

keywords, using the mark in the course of trade, in the sense of using it as part of its commercial activity to advance its trade.”

• Recognised context was key

• Survey evidence was an important factor in decision− Online public survey with expert evidence from statisticians

• Likely to be appealed

Reputation & LiabilityGuy Burgess, Clendons

Lessons• “Wild web” is becoming more

regulated− More litigation over online activities− Law is developing around online issues such as

AdWords− Legislation such as Harmful Digital Communications

Bill

• Privacy is now a major issue− All businesses must understand obligations− Increasing regulation & liabilities− Significant backlash if you get it wrong

• Be aware of reputational risks− Social media policy− Training / education− Consider “viral” implications of actions