Key Tips to Running Promotional
Contests in Canada
The following is a list of some of the key tips (though not an exhaustive check-list) for operating a successful contest in Canada:
Criminal Code. Take care to avoid the Criminal Code illegal lottery offences (e.g., provide a “no purchase necessary” entry option and skill element, such as a time-limited, multiple-step mathematical question).
Short Rules. Include “short rules” including 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 spots, etc.).
Long Rules. Ensure that precise “long rules” are prepared that reflect the details of the contest, cover potential contingencies (e.g., technical problems) and that set out the details of the promotion 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 indemnity and releases. Standard precedents, or rules downloaded from the web rarely accurately reflect a particular promotion. Like all law, counsel should not only understand what each provision means, but all rules should be relevant to the particular promotion. In this regard, contests are contracts, and so if you as a promoter want to rely on the rules in the event of an issue, they should be as accurate, clear and precise as possible.
General Misleading Advertising Provisions. Ensure that none of the advertising or marketing materials are generally 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.
Checklists. If contests are part of your company’s regular marketing, consider developing an internal checklist to ensure that all key legal requirements are covered (check-lists are commonly used by contest and sweepstakes lawyers and in-house counsel that frequently run contests).
Quebec Considerations. 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).
Intellectual Property Consents. Consider whether consents are needed (and if necessary obtained) to reproduce 3rd 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.
U.S. Advice. Seek U.S. legal advice if the contest will be open to U.S. residents (or limit the contest to Canada).
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.
NEW: CASL (anti-spam law): If using electronic communication for a contest (e.g., e-mail follow-ups, post-contest electronic marketing, contests run in conjunction with electronic surveys, etc.) consider whether Canada’s anti-spam law applies (and tailor the contest to comply).
LINKS AND RESOURCES
Legislation: Competition Act, Criminal Code, Competition Bureau: The Little Black Book of Scams: Advertisement Material, Bureau Enforcement Guidelines: Application of the Competition Act to Representations on the Internet, Deceptive Notices of Winning a Prize – Section 53 of the Competition Act, Promotional Contests – Section 74.06 of the Competition Act, Telemarketing – Section 52.1 of the Competition Act, Bureau Pamphlets: Deceptive Prize Notices, False or Misleading Representations and Deceptive Marketing Practices, Promotional Contests.
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