Facebook Inc. (FB) Seeing Illegal Contests on Aussie Biz Pages

Facebook Inc. (NASDAQ:FB) likely will find itself very busy destroying social-network communities across Australia, as there are reports that many Australian businesses are conducting illegal competitions and promotions on their Facebook pages, which not only break Facebook rules of use, but also may violate state laws Down Under.

“Facebook is clear that you cannot run a competition or promotion unless you use a third party app,” said Jamie White, an expert on social-media law in Australia. “Basically they don’t want you to use any of the functions of Facebook – likes, shares, tagging, wall posts and so on – to run a competition or promotion. Some brands and agencies aren’t fully aware of these rules, and many smaller businesses aren’t aware of State by State legislation around competitions which, if they aren’t followed, could result in financial penalties.”

And what might be even more damaging might be the removal of the company’s page from the Facebook Inc. (NASDAQ:FB) Web site, which would break up whatever fan loyalty may have been cultivated, and scatters it about cyberspace. Once removed from Facebook, the company’s reputation and ability to gather a following is impacted, White said.

Last year, it was reported that Facebook pages of Pizza Hut and Cadbury, among others, were removed from the India version of the site, and some U.S. companies that violated the rules of Facebook Inc. (NASDAQ:FB) also saw their pages removed. But it’s also not just Facebook Inc. (NASDAQ:FB); in Australia, anyway, most competitions require permits from each state – with each state having differing requirements. “If you want to run a game of chance, then you may need to get a permit from each State,” White said. “I am always surprised at the number of promotions and competitions you see on social networks from businesses who clearly think ‘real world’ laws don’t apply to the world of social media. … Every social media network has rules and regulations but so few people actually bother to read or follow them – which means your business could be running the risk of suddenly disappearing from networks.”