CANADIAN CONTEST RULES/PRECEDENTS
Do you need contest rules/precedents
for a Canadian contest?
We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada). These include precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more. Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist. For more information or to order, see: Canadian Contest Law Forms/Precedents. If you would like to discuss legal advice in relation to your contest or other promotion, contact us: Contact.
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I’ve been working on a fair number of contests lately. Sometimes they appear deceptively simple, but are in fact fairly highly regulated including a small tangle of modern (e.g., the federal Competition Act and social media sites’ terms of use) and antiquated laws (e.g., the sometimes tortuous illegal lottery provisions of the Criminal Code).
While I’ve worked on many, many contests over the past few years promoted through Facebook, Twitter, Google+ and other social media platforms, all of which have their own particular rules relating to the operation of contests (see: here, here and here), I recently had the opportunity to take a look at YouTube’s Contest Policies and Guidelines for a promotion I was working on. It’s been awhile since I looked at YouTube and their contest guidelines.
What I saw surprised me a little (though perhaps it shouldn’t have) and was a reminder that one of the first questions that should be asked when preparing to launch a contest is where will it be promoted. In other words, one set of rules does not fit all media (particularly the individual terms of use of the various social media platforms) and the type of promotion can have a significant bearing on whether it is permitted.
YouTube’s contest rules include a number of common-sense restrictions (and which are similar or identical to other social media sites), such as stating that sponsors are responsible for their contests, that contests must comply with local laws and regulations and cannot infringe third party rights. Like Facebook, YouTube’s rules also require that certain types of terms be included in official contest rules (e.g., stating that YouTube is not a sponsor, having entrants release YouTube, etc.).
Some of the distinctive restrictions in YouTube’s Contest Policies and Guidelines, which broadly apply to contests either “run” or “which use” YouTube, that caught my eye included the following:
1. No entries by minors (must be 18 or age of majority in the local jurisdiction(s) where the contest is promoted).
2. No transfer of ownership of entries to sponsors (a common term often otherwise included in contest rules generally).
3. No contests where purchases are required. In Canada, while “no purchase required” contests are common, promoters sometimes run promotions structured where purchases are required and are in fact a key condition to participate (e.g., where certain types of non-Criminal Code prizes are awarded and/or pure skill competitions).
4. Contests must be games of skill where winners are determined by clear judging criteria. No pure chance or mixed skill and chance contests, both of which are common in Canada (provided they are structured appropriately).
5. No use of data collected from entrants for marketing even with entrant consent (only contest administration purposes). Again, contest rules commonly provide that sponsor’s may use entrant information and submissions for both the administration of the contest and marketing. That is often the point.
Bottom line for social media and contests? Think about where you’ll be running your contest and look at (or ask your lawyer to look at) the current social media site’s (or sites’) rules governing your type of promotion. Some are certainly tougher than others and one size does not fit all when it comes to contests and social media.
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Legal Tips For Running
Contests/Sweepstakes in Canada
The following are some key legal tips for running contests/sweepstakes in Canada:
Criminal Code. Avoid the illegal lottery offences of the Criminal Code (e.g., include a bona fide “no purchase necessary” entry option and skill element, such as a time-limited, multiple-step mathematical question for potential winners as a condition of awarding a prize).
Short Rules. Include short rules (i.e., mini-rules) with all of the required Competition Act disclosure requirements for point-of-purchase materials (e.g., print and in-store marketing, social media and Internet sites, packaging and labeling, television and radio spots, etc.). For more information, see: Canadian Contest Forms and Precedents.
Long Rules. Ensure that precise long rules (i.e., the “official contest rules”) are included that reflect the details of the contest, anticipate potential contingencies (e.g., technical problems) and set out the details of the contest as clearly as possible – for example, eligibility requirements, how to enter, prize descriptions, number and values, draws and award of prizes, odds of winning and indemnifying and releasing the contest sponsor and any co-sponsors or prize sponsors. Standard precedents, or rules downloaded from the web rarely accurately reflect a particular promotion. In this regard, contests are contracts, and so they should be as accurate, clear and precise as possible in the event issues arise. For more information, see: Canadian Contest Forms and Precedents.
Winner Release Forms. Consider using winner release forms for contest winners. While not required by law in Canada, winner releases are almost always used by contest sponsors to have winners confirm that they have complied with all contest rules and release the sponsor from legal liability. Signing and returning winner releases is also commonly included in contest rules as a condition of prize award. Winner releases are particularly important for contests in which there may be higher risk (e.g., where the contest involves high value prizes or a trip prize). For trip contests, sponsors are generally advised to use releases for both winners and any travel companions (and guardian releases for minors). For more information, see: Canadian Contest Forms and Precedents.
Misleading Advertising. Ensure that advertising and marketing materials are not false or misleading (i.e., comply with the general misleading advertising sections of the Competition Act). In this regard, contests in Canada must comply not only with stand-alone contest provisions of the Competition Act (under section 74.06), but also with the general misleading advertising sections of the Competition Act. It is particularly important to ensure that the marketing collateral matches the contest rules and that key aspects of the contest (e.g., number and type of prizes, prize values, how to enter and win and any conditions/limitations) are accurately described.
Canadian Anti-spam Law (CASL): Comply with Canada’s federal anti-spam legislation (CASL). CASL is often relevant when running contests and promotions in Canada, including if electronic distribution lists will be used to market the contest/promotion, the contest/promotion will include the collection of e-mails for marketing unrelated to administration of the promotion, if participants’ e-mail addresses will be shared with third parties (e.g., related entities or affiliate marketers) or participants are asked or incentivized (e.g., with bonus contest entries) to “share” the contest/promotion with friends or family. Given the potentially severe penalties for violating CASL, which include administrative penalties of up to CDN $10 million, it is important to ensure that CASL is complied with for electronic marketing related to contests or other promotions open to Canadians. For more information about contests and CASL, see: Contests and CASL and CASL Compliance Errors. For CASL checklists and precedents that we offer for sale to comply with CASL, see: CASL Checklists and Precedents.
Quebec Contest Law. Ensure that Quebec legal requirements are met for contests run in Quebec (or take care to make sure that eligibility is limited to Canadian residents, excluding Quebec). In general, opening contests to Quebec residents requires regulatory filings with the Regie in Quebec, the payment of a duty or tax (which depends on the value of prizes), translation of contest rules and advertising and in some cases posting a bond/security.
Intellectual Property Consents. Consider whether consents are needed (and if necessary obtained) to reproduce third-party intellectual property – for example, trade-marks, logos, etc. – or to transfer ownership in contest materials – for example, where contestants create original material as part of the contest or promotion. Contest rules in Canada commonly include rights (e.g., a licence) for the sponsor to use information and content contributed by entrants and if entrants will be contributing original content (e.g., photographs, essays, etc.) it is also a good practice for sponsors to include guidelines relating to their rights to use (or reject) any entrant contributed content. See: Guidelines For Canadian Consumer Generated Content Contests.
U.S. Advice. Seek U.S. legal advice if the contest will be open to U.S. residents or limit the contest to only Canadian residents.
Social Media Site Rules. Comply with social media sites’ terms of use if using social media to promote or host a contest (e.g., Facebook’s Promotions Rules). Also ensure that appropriate disclosures are made in all social media marketing (i.e., include short rules). For more information, see: Contests and Social Media.
Other Competition & Advertising Rules. Consider whether other competition or advertising law rules may apply. For example, in addition to a stand-alone contest provision, the Competition Act also contains provisions governing deceptive prize notices, general misleading advertising and telemarketing that involves prizes.
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SERVICES AND CONTACT
We are a Toronto based Canadian competition law and advertising law firm who helps clients in Toronto, Canada and the United States practically navigate Canada’s advertising and marketing laws and offers Canadian advertising/marketing law services in relation to print, online, new media, social media and e-mail marketing.
Our Canadian advertising/marketing law services include advice in relation to anti-spam legislation (CASL), Competition Bureau complaints, the general misleading advertising provisions of the federal Competition Act, Internet, new media and social media advertising and marketing, promotional contests (sweepstakes) and sales and promotions. We also provide advice relating to specific types of advertising issues, including performance claims, testimonials, disclaimers, drip pricing, astroturfing and native advertising.
For more information about our services, see: services
To contact us about a potential legal matter, see: contact
For more information about our firm, visit our website: Competitionlawyer.ca
