Contests & CASL

CANADIAN CONTEST RULES & FORMS

Need contest rules and forms for a Canadian Contest? I offer a selection of Canadian contest rules and forms for common types of Canadian contests. For more information see: Contest Forms.

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Promotional contests in Canada are largely governed by the Competition Act, the Criminal Code and contract law. Other laws can also apply depending on the type of contest, including privacy, anti-spam and intellectual property law.

One of the areas of law that has affected contests the most over the past several years is CASL – Canada’s anti-spam legislation. For more information, see my CASL overview: Anti-spam (CASL).

In general, CASL requires express or implied consent to send “commercial electronic messages”. CASL also imposes specific form (i.e., disclosure) and opt-out (i.e., unsubscribe) requirements.

CASL has significantly impacted the way companies, individuals and other organizations engage in electronic marketing in Canada.

For Canadian promotional contests, CASL can be relevant in a number of ways, including where an existing marketing list is used to market a promotion, e-mail addresses are collected for later electronic marketing, electronic communication is used to administer the contest and where e-mail addresses are collected for marketing by co-sponsors or 3rd parties. CASL issues can also arise in connection with specific types of promotions – for example, contests run in connection with online surveys.

Of course, every contest/sweepstakes and promotion is different. which means that the CASL requirements in any particular case will vary.

Based on the severity of the law, with potential penalties of up to $1 million for individuals and $10 million for corporations, it is important that contest sponsors and their advisors ensure that promotions are CASL compliant.

POTENTIAL CASL ISSUES
THAT CAN ARISE IN CONTESTS

Some potential CASL issues that can arise in connection with Canadian contests include:

Collecting E-mail Addresses for
Post-contest Marketing

Sponsors commonly want to collect e-mail addresses during a contest for subsequent marketing. Contest rules also frequently include language stating that the sponsor may send marketing to entrants.

Running a contest can be an excellent opportunity to gather e-mail addresses of potential customers. However, since the introduction of CASL in 2014, sponsors need to take care to ensure that CASL’s consent, identification and unsubscribe requirements are met.

This typically includes ensuring that there is an affirmative, uncoupled express consent on contest entry forms, that the prescribed identification information is included on both entry forms and marketing sent to entrants and that communications include the required unsubscribe option.

One of the most common mistakes I see in this area are rules that merely state that entrants agree to receive marketing, which may be in the short or full contest rules, with no CASL compliant consent request or sponsor identification. In short, this is inadequate to ensure that CASL’s requirements are met.

Using E-mail or Other Electronic Communications
to Administer a Contest

Where contests involve e-mail entries and follow-ups by the sponsor to administer the contest (for example, to notify winners, answer entrant questions, award prizes, etc.), CASL issues can also arise.

The good news for sponsors is that there are CASL exceptions that can be relied on to respond to inquiries by e-mail.

It is a good practice, however, to ensure that any follow-ups to entrant inquiries are limited to the administration of the contest and, for example, that express consent be obtained to engage in subsequent electronic marketing.

A better practice yet is to obtain express up-front consent to both administer the contest and for subsequent electronic marketing.

Specific Types of Promotions

CASL issues can also arise in connection with particular types of promotions, such as surveys. For example, where a survey is run with an incentive (i.e., contest) to respond to questions.

In this context, promoters must take care to ensure that both privacy (e.g., in relation to personal information collected) and CASL (e.g., for subsequent commercial communications) are met in conjunction with the survey.

Contests Marketed to Canadians
(e.g., North America-wide Promotions)

Given that CASL also applies to international marketers marketing to Canadians (e.g., North America wide promotions), it is also necessary for sponsors to ensure that they have met CASL’s requirements to communicate with and send subsequent marketing to Canadian entrants.

American sponsors should be aware that Canadian anti-spam law is different than the U.S. rules in key respects, including requiring express opt-in consent unless an exception applies or a category of implied consent can be relied on.

Consent For Marketing By Identified Third Party

Contest sponsors should be aware that there are specific CASL rules where e-mail addresses are collected on behalf of 3rd parties. For example, a sponsor or contest organizer may want to collect e-mail addresses for use by a co-sponsor or other party.

In general, it is important to comply with CASL’s particular rules governing the collection of electronic addresses for use by third parties, which may include a consent request that includes the third party or sponsor and third party, specified contact information for the parties that will be sending the electronic communications and ensuring that marketing communications include the prescribed identification information for everyone on whose behalf messages are sent.

Potential Affiliate or 3rd Party Marketer Risk

One final area where CASL issues can arise in connection with contests relates to affiliate or 3rd party marketer risk.

Given that it is very common for brands to co-sponsor contests (e.g., with companies providing prizes) or engage 3rd party marketers, it is important for sponsors to consider the potential risk that a co-sponsor or affiliate marketer will violate CASL, which may lead to potential liability for the sponsor.

One risk mitigation option in this area is to enter into agreements with co-sponsors or affiliate marketers, ensuring that they agree to comply with CASL and with risk-shifting provisions in the event they do not (e.g., indemnity provisions in favour of the sponsor). Some of my clients have developed forms of agreement that they use or adapt for promotions involving co-sponsors or other third parties.

From a practical perspective, it is generally very important to discuss how a contest will be promoted with any marketing or other partners and evaluate both their understanding of CASL and commitment to compliance.

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CONTEST SERVICES

I offer a full range of Canadian contest legal services for compliance with the Competition Act, Criminal Code and other relevant laws.  My services include: preparing contests to comply with relevant federal laws, drafting short and long contest rules and statutory disclosure, reviewing promotional contest marketing and advertising materials for Canadian advertising law compliance and winner releases.

To contact me about a potential legal matter: Contact