Void Where Prohibited: Social Media Rules for Contests and Sweepstakes

Contests and sweepstakes are popular strategies for retailers to gain publicity and increase sales. To reach their audience, savvy marketing personnel may seek to conduct or promote such events through third-party web sites and social media. They may invite contestants to upload creative photos of themselves using the retailer’s products or services. Or they may advertise a sweepstakes through social media and encourage on-line entries. But they must beware:  Social media and other on-line forums frequently impose an extra layer of rules on top of the federal and state laws governing contests and sweepstakes.

As the popularity of social media sites and Internet services grows and their functionality expands, many such companies are developing and periodically revising comprehensive policies regarding the use of their services in connection with contests and sweepstakes sponsored by third parties. Thus, when conducting or advertising contests or sweepstakes on-line, retailers should keep the following in mind:

  • Some services, like Twitter, provide non-mandatory “guidelines” that are designed mainly to help sponsors to structure their contests and sweepstakes in ways that discourage entrants from violating the general rules for using that service. See Guidelines for Contests on Twitter at https://support.twitter.com/articles/68877. Otherwise, Twitter simply warns sponsors and other users not to violate state and federal laws, generally prohibiting any “unlawful purposes” or “illegal activities.” See a complete set of Twitter Rules.
  • Other services, like Facebook, have their own specific mandatory rules in addition to generally prohibiting illegal activity. For example, among other rules, Facebook requires that sponsors administer promotions through “Apps” (separate applications running on Facebook) and not use Facebook as the registration or entry mechanism for promotions. See a complete set of Facebook Promotions Guidelines.
  • In addition to restricting content, some service providers will require sponsors to indemnify them from any claims arising from the sponsor’s use of their service. Sponsors could therefore risk incurring significant additional expenses of defending service providers from claims by third parties. On March 1, 2012, Google’s new Terms of Service, which will include such an indemnification provision, will come into effect. Preview Google’s new policy.

Importantly, social media policies are subject to change, and they often do. Therefore, in addition to meeting all federal and state requirements, sponsors of contests or sweepstakes that are conducted or advertised on-line should keep up to date with the private rules of their chosen medium to ensure full compliance.

Related topics: Compliance