Reputation & liability in a viral world

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My presentation to the Australian and New Zealand Institute of Insurance and Finance (ANZIIF) Liability Conference, 3 April 2014, on reputational risk in a "viral" world, including aspects of privacy, the new Harmful Digital Communications Bill, social media issues, and recent AdWords case.

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Reputation & liability in a viral world

  1. 1. Technology & Risks: Reputation & liability in a “viral” world Guy Burgess - guy.burgess@clendons.co.nz Clendons Lawyers ANZIIF Conference 3 April 2014
  2. 2. Reputation & Liability Guy 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
  3. 3. Reputation & Liability Guy Burgess, Clendons
  4. 4. Reputation & Liability Guy Burgess, Clendons
  5. 5. Reputation & Liability Guy Burgess, Clendons
  6. 6. Reputation & Liability Guy Burgess, Clendons
  7. 7. Reputation & Liability Guy Burgess, Clendons
  8. 8. Reputation & Liability Guy Burgess, Clendons
  9. 9. Reputation & Liability Guy Burgess, Clendons The downsides of viral • Cyber bullying • Loss of privacy / privacy breaches • Reputational harm (attacks and self- inflicted) • Commercial & legal consequences
  10. 10. Reputation & Liability Guy 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
  11. 11. Reputation & Liability Guy 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
  12. 12. Reputation & Liability Guy 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)
  13. 13. Reputation & Liability Guy 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
  14. 14. Reputation & Liability Guy 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
  15. 15. Reputation & Liability Guy Burgess, Clendons Privacy
  16. 16. Reputation & Liability Guy Burgess, Clendons Privacy
  17. 17. Reputation & Liability Guy 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
  18. 18. Reputation & Liability Guy Burgess, Clendons Privacy breaches - EQC
  19. 19. Reputation & Liability Guy Burgess, Clendons Privacy breaches - EQC
  20. 20. Reputation & Liability Guy Burgess, Clendons Privacy breaches - EQC
  21. 21. Reputation & Liability Guy Burgess, Clendons Privacy breaches - EQC
  22. 22. Reputation & Liability Guy Burgess, Clendons Privacy breaches - EQC
  23. 23. Reputation & Liability Guy Burgess, Clendons Privacy breaches - EQC
  24. 24. Reputation & Liability Guy Burgess, Clendons Privacy breaches - ANZ
  25. 25. Reputation & Liability Guy Burgess, Clendons Privacy breaches by theft
  26. 26. Reputation & Liability Guy Burgess, Clendons Privacy breaches by theft
  27. 27. Reputation & Liability Guy Burgess, Clendons Privacy breaches by theft
  28. 28. Reputation & Liability Guy 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
  29. 29. Reputation & Liability Guy 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
  30. 30. Reputation & Liability Guy Burgess, Clendons Privacy  Identity  Reputation
  31. 31. Reputation & Liability Guy Burgess, Clendons Privacy  Identity  Reputation
  32. 32. Reputation & Liability Guy Burgess, Clendons Privacy  Identity  Reputation
  33. 33. Reputation & Liability Guy Burgess, Clendons Self-inflicted reputational harm
  34. 34. Reputation & Liability Guy Burgess, Clendons Self-inflicted reputational harm
  35. 35. Reputation & Liability Guy Burgess, Clendons Self-inflicted reputational harm
  36. 36. Reputation & Liability Guy Burgess, Clendons Self-inflicted reputational harm
  37. 37. Reputation & Liability Guy Burgess, Clendons Self-inflicted reputational harm
  38. 38. Reputation & Liability Guy Burgess, Clendons Self-inflicted reputational harm
  39. 39. Reputation & Liability Guy 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
  40. 40. Reputation & Liability Guy 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
  41. 41. Reputation & Liability Guy Burgess, Clendons Reputational attacks • UGotPosted.com “revenge porn” racket
  42. 42. Reputation & Liability Guy Burgess, Clendons On a lighter note…
  43. 43. Reputation & Liability Guy Burgess, Clendons On a lighter note…
  44. 44. Reputation & Liability Guy Burgess, Clendons On a lighter note…
  45. 45. Reputation & Liability Guy 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”
  46. 46. Reputation & Liability Guy Burgess, Clendons Social media backlash
  47. 47. Reputation & Liability Guy 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
  48. 48. Reputation & Liability Guy 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
  49. 49. Reputation & Liability Guy Burgess, Clendons
  50. 50. Reputation & Liability Guy 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
  51. 51. Reputation & Liability Guy Burgess, Clendons InterCity v Nakedbus • Nakedbus registered adwords for “inter city”
  52. 52. Reputation & Liability Guy 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
  53. 53. Reputation & Liability Guy 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

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