Police in Kent have arrested a man from Aylesham, near Canterbury, after he posted a picture of a burning poppy onto Facebook.
Kent Police said the 19-year-old was arrested on suspicion of malicious telecommunications after uploading the picture on Remembrance Sunday. He is being held in police custody awaiting interview.
The image was reportedly also accompanied by an offensive comment.
The arrest arrives as the director of public prosecutions, Keir Starmer QC, announced he is to prepare new guidelines about online abuse following a sharp increase in arrests under section 127 of the 2003 Communications Act.
Starmer said: "Social media is a new and emerging phenomenon raising difficult issues of principle, which have to be confronted not only by prosecutors but also by others including the police, the courts and service providers.
"In my view, the time has come for an informed debate about the boundaries of free speech in an age of social media."
According to the Crown Prosecution Service, under the Malicious Communications Act 1988 section 1, it is an offence to send any article which is: "Indecent or grossly offensive, or which conveys a threat, or which is false, provided there is an intent to cause distress or anxiety to the recipient."
The CPS website adds: "The offence covers letters, writing of all descriptions, electronic communications, photographs and other images in a material form, tape recordings, films and video recordings. Poison-pen letters are usually covered.
The arrest of the man from Aylesham was met with heavy criticism across other social media platforms.
David Allen Green, a journalist and lawyer for the New Statesman tweeted: "What was the point of winning either World War if, in 2012, someone can be casually arrested by Kent Police for burning a poppy?"
Green himself was the subject of a social media controversy during his "Twitter Joke Trial".
Green eventually won his High Court appeal against his arrest for making a bomb threats after he tweeted: "Crap! Robin Hood airport is closed. You've got a week and a bit to get your s**t together otherwise I am blowing the airport sky high!"
Australian musician and comedian Tim Minchin described the arrest as a "f*****g joke" on his personal Twitter account.
Nick Pickles, director of Big Brother Watch, the civil liberties campaign group, described the arrest as "utterly ridiculous".
He added: "It is not illegal to offend people and, however idiotic or insensitive the picture may have been, it is certainly not worthy of arrest.
"This case highlights the urgent need to reform a law that poses a serious risk to freedom of speech after several ludicrous prosecutions in recent months.
In March 2011, Emdadur Choudhury, a member of Islamist group Muslims Against Crusades, was convicted and fined £50 for offences under the Public Order Act after burning poppies in public in London.