Reputation & liability in a viral world
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Technology & Risks:
Reputation & liability in a “viral” world
Guy Burgess - [email protected] Lawyers
ANZIIF Conference3 April 2014
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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
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Reputation & LiabilityGuy Burgess, Clendons
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Reputation & LiabilityGuy Burgess, Clendons
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Reputation & LiabilityGuy Burgess, Clendons
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Reputation & LiabilityGuy Burgess, Clendons
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Reputation & LiabilityGuy Burgess, Clendons
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Reputation & LiabilityGuy Burgess, Clendons
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Reputation & LiabilityGuy Burgess, Clendons
The downsides of viral
• Cyber bullying
• Loss of privacy / privacy breaches
• Reputational harm (attacks and self-inflicted)
• Commercial & legal consequences
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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
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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
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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)
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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
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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
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Reputation & LiabilityGuy Burgess, Clendons
Privacy
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Reputation & LiabilityGuy Burgess, Clendons
Privacy
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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
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches - EQC
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches - EQC
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches - EQC
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches - EQC
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches - EQC
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches - EQC
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches - ANZ
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches by theft
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches by theft
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Reputation & LiabilityGuy Burgess, Clendons
Privacy breaches by theft
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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
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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
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Reputation & LiabilityGuy Burgess, Clendons
Privacy Identity Reputation
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Reputation & LiabilityGuy Burgess, Clendons
Privacy Identity Reputation
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Reputation & LiabilityGuy Burgess, Clendons
Privacy Identity Reputation
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Reputation & LiabilityGuy Burgess, Clendons
Self-inflicted reputational harm
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Reputation & LiabilityGuy Burgess, Clendons
Self-inflicted reputational harm
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Reputation & LiabilityGuy Burgess, Clendons
Self-inflicted reputational harm
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Reputation & LiabilityGuy Burgess, Clendons
Self-inflicted reputational harm
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Reputation & LiabilityGuy Burgess, Clendons
Self-inflicted reputational harm
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Reputation & LiabilityGuy Burgess, Clendons
Self-inflicted reputational harm
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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
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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
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Reputation & LiabilityGuy Burgess, Clendons
Reputational attacks
• UGotPosted.com “revenge porn” racket
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Reputation & LiabilityGuy Burgess, Clendons
On a lighter note…
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Reputation & LiabilityGuy Burgess, Clendons
On a lighter note…
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Reputation & LiabilityGuy Burgess, Clendons
On a lighter note…
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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”
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Reputation & LiabilityGuy Burgess, Clendons
Social media backlash
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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
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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
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Reputation & LiabilityGuy Burgess, Clendons
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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
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Reputation & LiabilityGuy Burgess, Clendons
InterCity v Nakedbus
• Nakedbus registered adwords for “inter city”
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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
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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