Legal Guide For Social Media Sweepstakes
Sweepstakes, contests and giveaways are more popular than ever on social media platforms. Such promotions are amazing tools that can help promote a brand or website. While promotions are excellent ways to increase brand awareness, they also come with legal risks.
Before running a social media sweepstakes, it is important to take into account several legal issues, as social media sweepstakes and contests are subject to a variety of federal and state laws. Below are a few tips to keep in mind to ensure that your sweepstakes are in compliance with local and federal laws.
Tip #1: Create an Eligibility Restriction
It is important to make the sweepstakes open only to a defined category of people (sweepstakes in the U.S. are usually only open to legal residents of the U.S.). Social media sweepstakes are accessible throughout the world and should be available only to legal residents of the U.S., unless you have approval by a lawyer that is familiar with sweepstakes law. This is important to avoid legal risks. It is also important to specify whether or not there are age restrictions for entrants. If the sweepstakes are open to children under the age of 13 or attracts the interest of children under 13, it is important for the sweepstakes to comply with the Children’s Online Privacy Protection Act (“COPPA”). To learn more about COPPA, please visit: http://www.ftc.gov/tips-advice/business-center/guidance/complying-coppa-frequently-asked-questions.
Tip #2: Only Ask for Basic Information
Only ask for information that is necessary to confirm: (1) the eligibility of the entrant; and (2) a way to deliver the prize to the winner. For example, asking the entrant for their income would be considered unnecessary information and would be deemed inappropriate.
Tip #4: Specify the Number of Entries Allowed
The sweepstakes should detail the number of entries that are allowed by each entrant to avoid legal risks. The person conducting the sweepstakes should also monitor the entries to make sure entrants are not using fake names to enter the sweepstakes more than the number of times specified.
Tip #5: Include an Alternate Method of Entry
It is important to include an alternative method of entry for all social media sweepstakes to protect the sweepstakes from being considered an “illegal lottery.” For example, instead of only allowing entrants to enter the sweepstakes online, one may also allow entrants to send in their information via mail. The alternative method of entry removes the possibility that the entrant is providing consideration for the chance of winning the sweepstakes. If the entrant must provide some consideration – usually this means money – then the sweepstakes is an illegal lottery. The entrant cannot pay for their chance to win. So, where the entrant may enter the sweepstakes by submitting their cable bill (they pay money for their bill) there must also be a free way to enter the sweepstakes.
Tip #6: Add Sponsor’s Liability
Bloggers should include a disclaimer of liability section in the official rules. For reference, please visit Section #5 on http://www.ifc.com/social-rules.
Tip #7: Register the Sweepstakes with the State
Some states (like New York and Florida) require sponsors to register the sweepstakes with the state if the prize is over a certain amount. A simple Google search will let you know if you need to register with the state. It is also important to check state rules because many states require the Sponsor to disclose specific information (i.e. odds of winning, dates of the contest, etc.).
Tip #8: Make Sure the Official Rules of the Sweepstakes are Clear
The rules are essentially a contract between the Sponsor and the participants, and these rules should be clear and detailed. At a bare minimum, the rules should contain the following information: (1) a statement that “no purchase is necessary to enter”; (2) information on how to enter the sweepstakes; (3) whether or not there are limits to the amount of entries per entrant allowed; (4) the sweepstakes period (the starting and closing date of the sweepstakes); (5) notification procedures (how Sponsor will notify the winner); and (6) a list of prizes offered and their approximate retail value (ARV represents Sponsor’s good faith estimate of the value of the prize).
Tip #9: Check Separate Rules for Individual Social Media Platforms
Social media platforms like Facebook, Twitter, and Pinterest publish their own separate rules for sweepstakes. If a Sponsor is considering publishing on a social media platform, it is important to comply with these requirements as well.
Conducting a social media sweepstakes requires that the promotion is structured in a way that complies with relevant local and federal law. Even though risk of enforcement is relatively low, it is important to protect yourself and avoid legal issues. For additional reading, please visit:
Photo by: The Bees Knees Daily under Creative Commons License.