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Competitions, prize draws and Facebook…

On 27 August 2013, something quite miraculous happened….

Facebook performed a momentous u-turn on its previous position on competitions and give aways on Facebook pages.

You no longer need to run your Facebook competitions and prize draws through third-party apps. You can post them directly on your Facebook page and you can even ask for likes and comments as a means of entry. Happy days!

Now Facebook wouldn’t be Facebook without having a few rules about competitions and prize draws, so you can read the latest rules here.

Facebook still requires that the competition entrants absolve Facebook of any responsibility related to the competition or give-away by including the following rules:

ii. Promotions on Facebook must include the following:

a. A complete release of Facebook by each entrant or participant.
b. Acknowledgment that the promotion is in no way sponsored, endorsed or administered by, or associated with, Facebook.

We are no doubt going to see even more competitions and prize draws on Facebook but what you need to be aware of is that just because Facebook has relaxed its own contractual rules doesn’t mean that your jurisdiction’s law on competitions and prize draws has changed.

So what is the UK law on competitions and prize draws?

Here in the UK, the Gambling Act 2005 makes it a criminal offence to run an illegal lottery – and that is what you will be doing if you require payment for entry into a prize draw or sweepstake. Now you really don’t want to be caught running an illegal lottery as you would be liable to a fine of up to £5,000 and/or imprisonment for up to 51 weeks.

You can charge for entry into a competition as long as you think that the skill requirement will either deter a significant proportion of potential participants from entering or prevent a significant proportion of entrants from receiving a prize (such as crossword puzzles).

If questions are too easy and the main route of entry is a premium rate telephone number or some other paid for route of entry, you must provide a free route of entry (which could include using a first or second class stamp or making a non-premium rate telephone call or text). Interestingly however, web entry may not satisfy the free entry route requirement. You must make this free route of entry clear and not discriminate between any methods of entry (so for example you must keep the completion or prize draw open for long enough so that a letter can reach you).

The CAP Code also applies.  Under the CAP Code, the promoter must ensure that the terms of the promotion are clear and well publicised – you can read the rules here but examples of what should be included are:

  • the full name and address of the promoter;
  • any restrictions on, or conditions of, taking part (for example, age, number of entries and geographical restrictions);
  • any requirement for a proof of purchase;
  • the closing date;
  • judging criteria;
  • the number and nature of prizes including those that are available to win and those that are guaranteed to be won;
  • how winners and results will be announced and if the promoter intends to feature the winners in post-event publicity;
  • who will own copyright in entries;
  • whether the promoter reserves the right to amend the rules; and
  • whether the promoter is allowed to provide a cash alternative for any prize.

So, if you are going to be running prize draws or competitions on Facebook or anywhere else, here’s what you must do:

  1. have clear terms of promotion well publicised.
  2. if the competition does not require sufficient skill or knowledge to discourage a significant proportion of the population from entering or it is a prize draw, then you must provide a free route of entry – web entry may not be sufficient, so in your terms you must say that people can enter by sending a letter to you at X address.

Copyright Suzanne Dibble, business law expert 2013

Disclaimer

Although the concepts in this article have global application, the information contained in the article is based on English law only and is provided for information purposes only and is not intended to amount to advice on which reliance should be placed. Suzanne disclaims all liability and responsibility arising from any reliance placed on such information. Professional advice should be obtained before taking or refraining from taking any action as a result of the above contents.

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About Suzanne Dibble

Suzanne Dibble is a multi-award winning business lawyer with vast experience ranging from acting for plc’s on billion pound projects to helping micro businesses with their day to day business law requirements. Having worked with Richard Branson, Simon Woodroffe and other famous entrepreneurs and having been a board director of a £100m+ turnover company, Suzanne is particularly commercially minded and entrepreneurial in her outlook and clients appreciate her practical, business minded, jargon-free advice. Suzanne was runner up in the prestigious Solicitor of the Year Award at the Law Society Excellence Awards 2011 and was also shortlisted in the Excellence in Client Service Award. Suzanne has won many other national awards. For details about free webinars and more practical legal advice for small businesses, go to lawyers4mumpreneurs and sign up for their newsletter.

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One comment

  1. Facebook is increasing day by day in the social world, its one of the best social network sites 🙂

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