Avoiding Common Legal Mistakes in Social Media Contests and Sweepstakes
In Maximize Social Business, Kyle-Beth Hilfer has put together a thoughtful rundown of certain things that can just go wrong with online contests and other sweepstakes-style promotions.
We often can get caught up in the excitement of the moment and create a contest without truly thinking through the ramifications. Don’t simply grab your rules from someone else’s site (how do you know they’re vetted or enforceable at all?). Don’t do this cheaply. And don’t do it without forethought. Keep your head.
Remember, the Federal Trade Commission is watching.
Hilfer outlines eight mistakes that social media managers can and do make.
- Forgetting the Rules. All contest creators should work directly with their company’s Legal Department to draft a vetted set of rules, and not simply lift them from other contests. In fact, involving the Legal Department from the very beginning is always a good idea.
- Running an illegal lottery. When games or contests change from judging of skill, and instead become ruled and decided by chance, they can essentially be converted to lotteries. This was evidently one of the FTC’s biggest complaints in 2012 and so is at issue. Beyond lotteries, know where gambling is illegal. Even if it’s perfectly legal where your company is, you might still have trouble if the game can’t fly where your contestant lives (see #6, below).
- Trading “likes” or “tweets” for sweepstakes entries. As Hilfer writes, “(t)he FTC has made it clear that offering sweepstakes entries in exchange for mentions in social media creates a material connection between the promotion sponsor and the consumer. The onus falls on the brand, and to some extent its agencies, to ensure that consumer’s testimonials disclose that such a material connection exists.”
- Choosing winners without performing adequate (or any) background checks. Do YOU want the Westboro Baptist Church to claim your prize? And for the Twitterati to know that? I didn’t think so.
- Ignoring intellectual property and other third party rights. Brands need to remember to obtain releases before posting photographs and videos. Those releases need to be obtained not only from the artist, but also from anybody in those videos and photos. Check licenses and permissions. Not all Creative Commons licenses are created equal.
- Ignoring global risk. You do realize that, even if your widget store is only in Vermont, that some of your contestants might be in Istanbul, right? Laws differ. Make sure you’re covered. The Legal Department is your best friend in this area. Remember them? Yes, keep them involved from start to finish and you can avoid some of these headaches. You can, potentially, avoid some of these issues by requiring that all contestants be American or from Vermont, etc. Even so, it pays to have the Legal Department look into it, at least to assure that your hypothetical Vermonter contestants really are from there.
- Attaching to a poorly managed charity or cause. Brands may have an altruistic desire to help out after a disaster, and that is laudable. But regulators are watching, and caution is always advised, even before the dust settles. The NY Attorney General’s Office offers best practices. For example, in the case of the Boston Marathon bombing, a number of charities sprung up, seemingly overnight. Plus there were victims with Kickstarters and the like, who needed cash on hand to pay medical expenses. Mayor Thomas Menino’s office had the foresight to create the One Fund, which was a place for funds to go. That charity took responsibility and that means it could (and probably is, potentially) a target for lawsuits. But better that than a fly by night operation where you can’t contact anyone to get your money back.
- Forgetting to clear trade promotions. Can your contestants come from inside your organization? What happens if they trash your reputation with their contest entry? Set clear and well-defined rules, as challenges to those rules can give you one massive headache.
One last thing – no contest! Follow Hilfer; she knows her stuff.