A
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
CHANCE
CONSIDERATION
Lottery
Prize
Sweepstakes
Contest
Amusement
Which rules apply?
1. RULES:
• 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
them
–
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
size;
– 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
Consideration
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
entry
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
guidelines
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
enter
• 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
entries
Pinterest and Prizing
New Marketing Guidelines as of
December 2012:
Don’t:
•
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
like.
•
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
•
Requirements:
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
