Social Media Contests (and Sweepstakes): Your Comprehensive Legal Guide
Updated: Dec 1, 2021
This post is not legal advice and is for general informational purposes only. Always speak with a lawyer before acting on any of the information contained herein.
Are you planning a contest or sweepstake this holiday season? Read this post before you take any further steps.
Using social media to host a promotional contest is a smart way to target a large audience to increase your engagement, reach, followers, and leads. We’ll cover some of the rules in place you need to consider before launching your next big contest.
Get in touch with us so we can take care of the legal framework for your contest.
SOCIAL MEDIA GUIDELINES
Social media platforms have their contest-related guidelines. Here’s a quick overview of the guidelines from the most used platforms for contests.
Through Facebook, promotional contests can be administered through pages, groups, events, or apps. However, Facebook expressly prohibits the use of personal timelines and friend connections. Using language like, “share on your timeline to enter”, or “share on your friend’s timeline to get an additional entry”, and “tag your friends in this post” are not allowed.
Facebook prohibits tagging or encouraging people to tag themselves in content in which they are not depicted.
Additionally, you must also:
Include a complete release of Facebook by each person entering or participating in your promotional contest;
Acknowledge that the promotional contest is in no way sponsored, endorsed, administered by, or associated with Facebook.
Like Facebook, Instagram doesn’t allow you to tag content or encourage participants to tag themselves in content in which they aren’t depicted. For example, you can’t encourage people to tag themselves in photos if they aren’t in the photo.
Also, you must include:
A complete release of Instagram by each participant;
An acknowledgement that the promotional contest is in no way sponsored, endorsed, administered by, or associated with Instagram.
Twitter requires that your contest rules include the following:
A rule discouraging the creation of multiple accounts. For example, “anyone found to be using multiple accounts to enter will be disqualified”.
Avoid posting duplicate or very similar tweets. For example, avoid creating rules like “whoever re-tweets the most will win”.
QUEBEC RULES FOR CONTESTS AND SWEEPSTAKES
Quebec rules for publicity contests or sweepstakes also apply to contests or sweepstakes offered online. You must register with Quebec’s Régie des alcools, des courses et des jeux (the "Régie") and provide them with the following information:
1. File the publicity contest form with the Régie.
Where the total value of the prize offered exceeds $1000, the form must be filed at least 30 days before the contest. If the value is less than $1000 it must be filed at least 5 days prior.
2. Pay the fee.
If your contest is only for Quebec residents the fee is 10% of the total prize value.
If the contest is open to all Canadian residents, the fee is 3% of the total prize value.
International publicity contests do not need to pay a fee (since June 2021).
In some cases, you may have to provide security. The first case would be if your company has no headquarters or place of business in Quebec. Second, if you were convicted of an offence under the Act or the Rules in the year prior to your contest’s launch date. Third, the value of the prize being offered to Quebec residents exceeds $5000. Fourth, if the total value of the prizes offered to Quebec residents exceeds $20,000.
4. Contest rules
Submit the contest rules before the launch day. In some cases, the Régie will also accept rules submitted on the launch date. For prizes where the total value exceeds $2000 then file these rules at least 10 days before. The rules must also inform contestants that they can submit legal disputes concerning the contest to the Régie for a ruling.
5. Contest winner
60 days after the winner is selected, you must submit a written report to the Régie.
You must provide the contest rules in French.
Failing to comply with the provincial rules can lead to fines ranging from $50 to $75,000 based on various circumstances.
FEDERAL RULES FOR CONTESTS/SWEEPSTAKES
Other laws like the Competition Act and the Criminal Code apply to contests. You also need to consider compliance with Canadian privacy laws and Canada’s Anti-Spam Legislation.
Your contest rules need to contain some specific information. Create a set of short- and long-rules, the short-rules are what will appear in your post, and reference the long-rules (which can be posted on your website). Your rules should include:
the number and approximate value of prizes;
the regional allocation of prizes;
information on the chances of winning;
if it’s a contest of chance (i.e. you’ll choose a random winner from a pool of entries) then a skill-testing question;
the last date to enter; and
any fact that may materially affect a participant’s chances of winning.
Failing to comply with the Competition Act can lead to penalties upwards of $750,000 for an individual and $1,000,000 for a corporation for a first-time offence. Particularly, if a person engaged in conduct that goes against:
providing adequate and fair disclosure about the number and approximate value of the prizes, their regional allocation, and any fact that can materially affect the chance of winning;
if the distribution of the prizes is unduly delayed, and;
if the selection is not made on a basis of skill or is made on a random basis.
The Criminal Code prohibits that a requirement that a product or service be purchased as the sole condition to enter a contest. Specify in your contest rules that no purchase is necessary. Otherwise, it may be classified as an illegal lottery under the Criminal Code. Should it be considered an illegal lottery, you may be found guilty of an indictable offence and liable to imprisonment for a term not exceeding two years.
There's a lot of rules to consider. Understanding the interrelation between them and the laws is a complicated task. We can draft the required short- and long-form rules so that you can focus on the other details of your contest. Get in touch with us today.