Social Media Marketing Series #5: Sweepstakes, Contests, and User Generated Content

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merican Bar Association Antitrust Division

Private Advertising Litigation, Media and Technology,

& Consumer Protection Committees Present:

Social Media Marketing Series #5:

Sweepstakes, Contests, and User

Generated Content

February 11, 2013

Presented by:

Melissa Landau Steinman, Partner, Venable, LLP

Ira Schlussel, General Counsel, ePrize, Inc.


Same rules apply to promotions on social media

– Must comply with lottery and gambling laws

– Material terms & rules must be posted

– Follow other laws and regulations for specific types of

promotions/claims, e.g., CAN-SPAM, mobile/telemarketing laws,

endorsements and testimonials guides, privacy laws

– Subject to all other consumer protection and privacy laws









Which rules apply?



• Required under state and federal law; should be readily available to all participants and clearly set forth the details

• Include liability disclaimers/releases

• Required disclosures: odds of winning, eligibility, deadlines, ARV of prizes

• Some states require posting (e.g., MA, RI); some states also require posting of winners’ lists

• Some social media sites require special disclosures 2. Registration and/or bonding

• Sweepstakes over $5,000—NY and FL ($500 for RI) • “Amusement contests” in AZ


“Free” Gifts and Rewards Programs on Social Media

“Free” gift offers and rewards programs are also regulated under state and federal

law, but not as strictly

Free gifts

• Clear and conspicuous disclosure of terms, any costs important • Cannot raise price of base item to cover price of promotional item

Rewards programs

• Terms and conditions very important • Must reserve right to change/modify • Notice?

• Class actions largely unsuccessful (airlines, banks/credit cards) • Consumer protection/UDTPA

• Breach of contract

• Negative option renewal

• Can create tax issues, possible unclaimed property issues


Prize Promotions and User Generated Content on

Social Media: Risk Management and Best Practices

While social media/UGC promotions may have many of the same issues as traditional sweepstakes and contests, they can have unique issues as well:

– Consideration Issues

– Third party platform rules

– Voting– e.g., cheating and the use of bots

– Intellectual property

– Privacy


Clear and conspicuous disclosures

on the site and in the rules

Include clear submission

guidelines/restrictions and follow


Screen before posting submissions

Objective judging criteria

Contest phases


Submission Guidelines

– The Submission must be in .jpg format; – The Submission must not exceed 5 MB in


– The Submission must contain a title and description;

– The Submission's title and description must be in English; and


Can a UGC contest run afoul

of lottery laws?

Image Placeholder

Lottery = Prize, Chance and


Time based consideration to create UGC

Chance in determining winner

Draw a winner (break tie)

Vote only promotions


Judging Criteria

Image Placeholder

Creativity (33%)

Quality of Submission (33%)


Qualified Judges

Image Placeholder

They must be objective

They must be qualified


Public Voting – Preventing Fraud and Hacking

– Include language in your rules:

• Limit: Each person may vote one (1) time per day during the Voting Phase. Multiple votes received from any person or email address in excess of the stated number will be void. Participants are prohibited from obtaining votes by any fraudulent or inappropriate means, including, without limitation, offering prizes or other inducements to members of the public, as determined by Sponsor in its sole discretion. Such votes will be disqualified.


CONTESTS: And the winner is...

• Leaderboards

– Add sizzle but…


Intellectual Property and

Ownership in Entries

Rules should include IP releases so that you can post submissions

online, reuse/republish as desired

Should get signed, written release to use commercially

Signed writing required under copyright law

– Affidavit of eligibility and release for winners

Federal E-Sign Act

– Just ask for the rights you need—people can be touchy

– Rules should be clear : no third party IP

Sponsor may want to provide pool of “clips” for use in creating



User Generated Content – Advertising Litigation

Subway v. Quiznos (Doctor's

Associates, Inc. v. QIP Holder LLC)  Quiznos UGC contest asked

entrants to submit: videos comparing a Quiznos sandwich to a Subway sandwich.

 To generate interest, Quiznos posted user-generated video examples

 Subway sued Quiznos for false advertising under the Lanham Act, claiming examples contained false and misleading statements

Issue: Whether Quiznos was

immune to false advertising claims under Section 230 of the CDA: No provider or user of an interactive computer service shall be treated as the publisher or speaker of any

information provided by another information content provider.

 Case settled after court denied Quiznos’ motion for summary judgment

Plot spoiler: (it’s what NOT to do)


Understand the

Social Landscape

Each social network has its

own set of rules and usage



Facebook Rules for Promotions

CAN’T run a sweepstakes or contest directly on a Facebook page–

 has to be through a third-party application/ on a canvas tab

CAN’T condition entry on taking action on Facebook, e.g.,

– liking status update or commenting on Wall – uploading photo – checking into Place

CAN’T use Facebook functionality as automatic entry mechanism

– BUT, CAN include certain actions (“liking” Page, checking into

Place, or connecting to app) as

part of entry process

CAN’T use Facebook features (e.g., “Like” button) as voting mechanism

CAN’T use Facebook to notify winners

MUST include specific

releases/disclosures re: Facebook – Facebook not affiliated, sponsor

of promotion

– Data provided is provided to sponsor, not Facebook

– Releases/disclose in rules and on entry form


Twitter Promotions

• Twitter Terms and Conditions discourage creation of

multiple accounts; rules regarding retweeting to


• Limit on number of tweets/entries to one per day

• E.g., don’t encourage retweets to win

• Recommend including @usernameMention in tweet

entries so will be visible in user timeline

• Suggest including relevant “hashtag” topics in tweet



Pinterest and Prizing

New Marketing Guidelines as of

December 2012:


Run promotions that encourage

spammy behavior, such as asking

participants to comment repeatedly.

Run a sweepstakes where each pin,

repin, or like represents an entry, or

ask pinners to vote with a repin or


Overdo it: Contests and promotions

can be effective, but you don’t want

to run a contest too often.

Suggest that Pinterest sponsors or

endorses you: Make sure you don’t

say or imply this anywhere in your

marketing materials or branding.


Refer a Friend and UGC Promotions/CAN-SPAM

Prize promotions with a “refer a friend” component should be

vetted for CAN-SPAM compliance

 CAN-SPAM may apply if coupons, points, additional

sweepstakes entries offered in return for forwarding a

commercial email, including a social media message


1. Opt-out mechanism

2. Sender’s physical postal address


Mobile Marketing: Social Media Sweeps Now

Coming to Your Phone?

Three key (intertwined) concepts:

Consent: Must have express prior authorization to send text messages Disclosure: How do you make adequate disclosures with limited space?

Privacy: What are you doing with the PII you get, how are you disclosing, and how are you getting consent?

Who is regulating? • FCC

• FTC: new report on mobile out less than two weeks ago • State AGs

• California AG very active on mobile privacy and regulating apps

• Florida AG has brought a number of cases, specific disclosure requirements

• E.g., indicated that price and terms of offer would need to be within 125 pixels of submit field, with other information presented in a minimum font size/color that contrasted with background

• Industry trade associations


Text to Win

Are text charges consideration?

 American Idol/Deal or No Deal Cases

 Hardin v. NBC Universal, Inc. et al

Current thinking:

 Promotions using standard text messaging charges are probably relatively

low risk --although not completely without risk


Thank you!

Melissa Landau Steinman, Partner, Venable, LLP

Ira Schlussel, General Counsel, ePrize, Inc.




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