Ok so I am a little bit addicted to Facebook. So I do see a lot of content on there. But not a day goes by without me seeing what had previously been a major breach of Facebook’s rules on competitions and prize draws. You know, the “like this page to win a macbook pro” or the “comment here to win an iPad” posts.
Now these aren’t statutory rules of course, these are just Facebook’s own contractual rules – but they actually had a more unpalatable consequence for breach than statutory rules do – yes, the loss of the Facebook page that you have grafted so hard to build, not to mention the expense of promoting your page to gain likes etc.
However, as of yesterday (27 August), all that is a thing of the past!
You no longer need to run your Facebook competitions and prize draws through a third party app. You can post them on your Facebook page and you can even ask for likes and comments as a means of entry.
Now Facebook wouldn’t be Facebook without having a few rules about competitions and prize draws, so you can read the latest rules here.
This is great news for small business owners who didn’t have the know-how, time or funds to mess around with third party apps.
We are now doubt going to see even more competitions and prize draws on Facebook and that is why this article is so timely – just because Facebook has relaxed its own contractual rules doesn’t mean that English law on competitions and prize draws has changed. And with potential consequences of a fine of up to £5,000 and/or imprisonment for up to 51 weeks, this really is an area that you need to be aware of and comply with.
So what is the 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 (like the ones you hear on the competitions at the end of Jeremy Kyle, not that I watch it…) 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.
As well as the Gambling Act applying to competitions and prize draws, the CAP Code also applies. The CAP Code applies to pretty much all non-broadcast promotions (ie anything not on TV or radio) and has recently been extended to cover paid for and non-paid for space under your control eg your social media sites.
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:
- have clear terms of promotion well publicised; and
- 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 or by texting (at the cost of a standard rate text) to x number.
If you don’t have terms for competitions or prize draws in place and you would like to be sure that you are doing things properly, get in touch and we will help you with our very affordable options to protect your small business.
© 2013 Suzanne Dibble, business law expert