Canadian COMPETITION LAW

CANADIAN CONTEST RULES/PRECEDENTS

Do you need contest rules/precedents
for a Canadian contest?

We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada).  These include precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more.  Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist.  For more information or to order, see: Canadian Contest Law Forms/Precedents.  If you would like to discuss legal advice in relation to your contest or other promotion, contact us: Contact.

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Social media is increasingly important for effective marketing and promotion, including the operation of contests.  Contest organizers should be aware, however, that there can be specific terms of use that apply to the promotion and administration of a contest using social media.

For example, Facebook’s Statement of Rights and Responsibilities, the terms of use governing its relationship with its users, requires users to:

1.  Follow its Promotions Guidelines and other applicable laws when publicizing or offering any “contest, giveaway, or sweepstakes” on Facebook.

2.  Follow certain rules when collecting user information (not collect user information without consent, state that Facebook is not collecting the information and include a privacy policy stating what information is being collected and how it will be used).

3.  Agree to follow Facebook’s Pages Terms when creating or administering Facebook pages, which include rules relating, among other things, the collection of data and consent and notice requirements.

Facebook’s Promotions Guidelines set out rules for using Facebook to communicate or administer contests.  “Administer” is defined broadly as any element of promotion, including collecting entries, conducting a drawing, judging entries or notifying winners.  The definition of “communication” is equally broad and means promoting, advertising or referencing a promotion in any way on Facebook (e.g., in advertisements, on Facebook pages or Wall posts).

Facebook’s key rules for promotions are:

1.  Requiring promotions to be administered within Apps on Facebook.com, either on a Canvas Page or a Page App.

2.  Including certain information (a release of Facebook by entrants, acknowledgment that the promotion is not sponsored/endorsed by (or affiliated with) Facebook and to whom information is being disclosed to).

3.  Limiting Facebook-feature related conditions for registration or entry (only liking a page, checking into a Facebook place or connecting to the contest organizer’s app.).

4.  Not using Facebook features/functionality to register or enter (e.g., not automatically register/enter participants that like a page).

5.  Not using Facebook features/functionality (e.g., like buttons) as contest voting mechanisms.

6.  Not notifying contest winners through Facebook (e.g., through Facebook messages, chat, or posts on profiles or pages).

Other Facebook terms of use that can apply to the operation of contests and other promotions include its rules for the use of its name, trademarks and logos and linking to Facebook (set out in Facebook’s Brand Permissions Center) and rules requiring contest promoters to generally operate contests lawfully (including local laws for official rules, offer terms and eligibility requirements).

Facebook also has restrictive rules relating to gaming and lotteries, including rules relating to the promotion of government lotteries on Facebook.

Failing to comply with Facebook’s general terms of use and Promotions Guidelines can have serious impacts for a contest relying on Facebook for promotion, given that Facebook has broad rights under its terms of use to reject or remove pages or stop providing all or part of Facebook.

Of course, other areas of law that should be practically considered in preparing contest rules and promotional materials include Canadian competition law and Canadian advertising laws generally, privacy law and in some cases intellectual property considerations – for example, if a promotion will involve the reproduction of 3^rd party trademarks or logos that may require consent or the transfer of rights for original material created by entrants in a contest (e.g., original works that may be covered by copyright that may require transfers).

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Legal Tips For Running
Contests/Sweepstakes in Canada

The following are key tips for operating legal contests/sweepstakes in Canada:

Criminal Code.  Avoid the illegal lottery offences of the Criminal Code (e.g., include a bona fide “no purchase necessary” entry option and skill element, such as a time-limited, multiple-step mathematical question for potential winners as a condition of awarding a prize).

Short Rules.  Include short rules / mini-rules with 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 and radio spots, etc.). For more information, see: Canadian Contest Forms & Precedents.

Long Rules.  Ensure that precise long rules (i.e., the official contest rules) are included that reflect the details of the contest, anticipate potential contingencies (e.g., technical problems) and set out the details of the contest 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 indemnifying and releasing the contest sponsor and any co-sponsors or prize sponsors.  Standard precedents, or rules downloaded from the web rarely accurately reflect a particular promotion. In this regard, contests are contracts, and so they should be as accurate, clear and precise as possible in the event issues arise. For more information, see: Canadian Contest Forms & Precedents.

Winner Release Forms. Consider using winner release forms for contest winners. While not required by law in Canada, winner releases are almost always used by contest sponsors to have winners confirm that they have complied with all contest rules and release the sponsor from legal liability. Signing and returning winner releases is also commonly included in contest rules as a condition of prize award. Winner releases are particularly important for contests in which there may be higher risk (e.g., where the contest involves high value prizes or a trip prize). For trip contests, sponsors are generally advised to use releases for both winners and any travel companions (and guardian releases for minors). For more information, see: Canadian Contest Forms & Precedents.

General Misleading Advertising Provisions.  Ensure that advertising and marketing materials are not 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. It is particularly important to ensure that the marketing collateral matches the contest rules and that key aspects of the contest (e.g., number and type of prizes, prize values, how to enter and win and any conditions/limitations) are accurately described.

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). In general, opening contests to Quebec residents requires regulatory filings with the Regie in Quebec, the payment of a duty or tax (which depends on the value of prizes), translation of contest rules and advertising and in some cases posting a bond/security.

Intellectual Property Consents.  Consider whether consents are needed (and if necessary obtained) to reproduce third-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. Contest rules in Canada commonly include rights (e.g., a licence) for the sponsor to use information and content contributed by entrants and if entrants will be contributing original content (e.g., photographs, essays, etc.) it is also a good practice for sponsors to include guidelines relating to their rights to use (or reject) any entrant contributed content. See: Guidelines For Consumer Generated Content Contests.

CASL (Canadian Anti-Spam Law).  If consents will be gathered for non-contest or later marketing to entrants, ensure that a CASL-compliant consent request is included when entrants enter the contest. Also, care should be taken for some types of contests where participation may require actions that could be considered spam under CASL (e.g., share with friends or family type promotions for additional contest entries). For more information, see: Contests & CASL. See also: Canadian CASL (Anti-Spam Law) Checklists and Precedents.

U.S. Advice.  Seek U.S. legal advice if the contest will be open to U.S. residents or limit the contest to only Canadian residents.

Social Media Site Rules.  Comply with social media sites’ terms of use if using social media to promote or host a contest (e.g., Facebook’s Promotions Rules). Also ensure that appropriate disclosures are made in all social media marketing (i.e., include short rules). For more information, see: Contests and Social Media.

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.

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SERVICES AND CONTACT

I am a Toronto competition and advertising lawyer offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law.  I also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

My experience includes advising clients in Toronto, Canada and the US on the application of Canadian competition and regulatory laws and I have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal, pricing and distribution, Investment Canada Act and merger matters. For more information about my competition and advertising law services see: competition law services.

To contact me about a potential legal matter, see: contact

For more regulatory law updates follow me on Twitter: @CanadaAttorney

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