If you’ve spent any amount of time on Facebook, Twitter or any social media site, you have probably noticed that they are littered with contests. Social media is a great venue for promoting awareness of a business or a brand and in a world where engagement is the name of the game. Social media contests are a great way for any business to get exposure, increase their number of followers or “likes”, encourage participation and engagement and grow their email database. Social media has provided a powerful medium for businesses to harness their customer’s playful and competitive nature and social media platforms, such as Facebook and Strutta, are now providing tailored solutions to ensure that it’s easy to run a contest without a hefty investment.
So what is a social media contest? It can be a sweepstake or a giveaway, or involve a competition, where submitted materials are judged. Social media lends itself to competition based contests where contestants submit photos or videos of themselves doing fun and interesting things. Judging of these contests is often audience-based, which has the effect of increasing the exposure of the contest and therefore, the product or business. Contests can also be used to harness valuable data about your customers; for example, asking entrants for their email is an easy way to ask them to opt-into receiving your newsletter.
And while most participants are excited to discover they’ve won a contest; ambiguities in the contest rules can result in unintended consequences. Carefully worded rules and promotional materials can help avoid both negative publicity and unhappy participants.
We’ve all seen the “no purchase necessary” language in contest rules. This requirement originates from the Criminal Code, which prohibits contests where winners are determined based on chance (or a mix of chance and skill) if the entrant is required to pay money or give valuable consideration. Contest providers should also take care to specify how a participant can enter the contest without making a purchase, for example, by visiting the prover’s website or by mailing an entry.
The Criminal Code also prohibits contests where winners are determined solely by chance and as a result, often include a skill-testing question. If a contest already involves an element of skill, the contest provider may forgo the skill-testing question, but as there is some ambiguity around what qualifies as a “skill”, contest providers may opt to include the skill-testing question out of an abundance of caution.
The Competition Act, which also governs Canadian contests, sets out a number of requirements and requires adequate and fair disclosure. In particular, it requires disclosure of the number and approximate value of prizes, the regional allocation of prizes and important information relating to the chances of winning (such as the odds of winning). Additionally, such disclosure must be made available to participants without them having to take active steps to obtain these details. Other key requirements relate to contests where there are early bird prizes for first entrants to a contest and where there are multiple prizes to be awarded at different times. The Competition Act also stipulates that the distribution of prizes cannot be unduly delayed and that participants be selected or prizes distributed on the basis of skill or on a random basis.
The Competition Act also protects against false and misleading representations and deceptive marketing practices and it is important that contest providers review their contest marketing materials to ensure they are not misleading in any way.
Contest providers also need to be aware of the particular requirements of running a contest in Quebec. The Régie des alcools, des courses et des jeux (known as the Régie) has additional established specific requirements for contests that are available to residents of Quebec. These onerous requirements involve filing the contest rules and all promotional materials with the Régie, paying duties on the value of the prize to the Régie and in some cases, paying a security bond. Additionally, certain statements must be included in the contest rules and ultimately, the Régie has authority to determine whether the contest rules can be changed or cancelled. And finally, the Office Québécois de la langue française requires that all contest rules be translated and made available in French. Given these requirements, it’s not surprising that may contests limit eligibility to exclude residents of Quebec.
Social media contests also have unique considerations. Providers should be careful to limit the number of entries to prevent websites from being overwhelmed with entries and providers that make use of any technology to receive or tabulate entries should consider protections around the failure of technology. Additionally, contests that involve the submission of any intellectual property (art, photos, music, etc.) should have carefully drafted rules which state that: the submission is the original work of the submitter and does not violate any other parties’ intellectual property rights; that the submitter relinquishes all rights to such submitted content to the contest provider; and that the submitter has obtained all permissions required to make the submission.
Contest rules should also contain other key provisions, such as eligibility requirements, the right to disqualify inappropriate submissions, the right to amend the contest rules and the right to provide a different prize. Contest providers should also include releases and indemnities in the contest rules, especially where travel-related or high value prizes are included. Finally, contest providers should ensure that their contest complies with Canadian privacy laws and that any personal information collected from participants is not used for any other marketing purpose, unless the participant has expressly consented to such use.
Social media platforms may impose their own rules governing contests run on their platforms. For example, Facebook has its own rules governing Facebook promotions, which include making participants aware that Facebook is not affiliated with the promotion and prohibiting certain features from being used to administer the promotion (such as “sharing on your timeline” to gain an entry). Twitter also has guidelines that govern Twitter contests and these are aimed at discouraging the creation of multiple accounts and repeated Tweets.
Sponsorship is another area of contest law that many businesses fail to consider. Where a third party is donating a prize that forms the basis of a contest, contest providers would be prudent to enter into a sponsorship agreement that outlines the rights, responsibilities and protections of each party.
Social media has provided a powerful medium for businesses to harness their customer’s playful and competitive nature and social media contests are now seen to be a key piece of any social media strategy. However, contest providers should be aware of the various requirements of the Criminal Code and the Competition Act. A failure to comply with the applicable legislation can result in a fine, imprisonment or being ordered to publish a corrective notice. Contest providers should also be aware of the need for adequate and full disclosure in their marketing materials, appropriate disclaimers in their contest rules, and compliance with privacy laws and platform guidelines. Finally, the particulars of each contest can raise unique issues and therefore contest providers would be well-served to have counsel review any proposed contest rules and materials, including sponsorship agreements, prior to a contest campaign being launched.
The information provided above is for educational purposes only. This information is not intended to replace the advice of a lawyer or address specific situations. Your personal situation should be discussed with a lawyer. If you have any questions or concerns, contact a legal professional.