Hi AnneM,
Internet law is still a developing area in Australia and as such, there is much uncertainty about internet liability, especially in relation to the growing prevalence of social media and social market places. Further, there are jurisdictional issues as to which country's laws apply (e.g. America's or Australia's?) Much of it comes from academic debates, analogies with exciting rules and passing comments from judges (persuasive at best).
Currently, I do not believe group admins would be responsible for the actions of their group members. There may be a responsibility to take reasonable measures to identify, flag, delete or block users who defame or are known to sell illegal/improper products. However, beyond this, there wouldn't be much more liability. You can compare Facebook group admin to the host of Gumtree or other private websites.
The best someone could argue is that you were negligent in allowing a user to induce purchases of illegal/improper products. However, if you:
- Take reasonable measure to supervise the discussion on your website;
- Add a disclaimer in the description page;
- Delete or flag or block users/posts that breach group rules;
- Any other measures you can think of to prevent scams/illegal activity
You should be able to satisfy to courts that you were not negligent. This case:
Caltex Refineries v Stavar (2009) 75 NSWLR 649 may be of assistance as to the approach judges in NSW take toward Facebook group admin's liability.