Australia: Playing by the rules: the law of social media competitions and promotions

Online competitions or promotions must be vetted carefully to prevent businesses inadvertently exposing themselves to significant financial penalties and reputational damage.

Facebook, Pinterest, Instagram, LinkedIn, Twitter – they're all platforms that businesses are using to engage directly and quickly with their existing customer bases and to win new customers. One popular marketing strategy that can add significant value is to use a social media platform to undertake a competition or promotion.

However, there are potential pitfalls about which businesses need to be aware when running a social media promotion or competition, or risk significant financial penalties and reputational damage.

Trade promotion regulations

If the online promotion or competition provides a chance to win a reward or prize then it may be caught by the regulations applying to trade promotions in each of the States and Territories of Australia.

In essence, the trade promotion regulations will apply to online competitions where the lottery or competition involves an "element of chance", including any kind of draw. An element of chance may be involved even if some skill is also required. It is only where a promotion involves a competition or game that is solely a "game of skill" (for example, where all entries are judged and the "best" is declared the winner) that the regulations will not apply.

If the trade promotion regulations apply, you must:

  • develop terms and conditions for the promotion;
  • get permits to conduct the promotion, which are required in at least some States and Territories; and
  • meet various requirements for conducting the promotion, including specific terms and conditions, advertising, record-keeping and managing privacy issues.

Significant penalties exist for non-compliance with trade promotions regulations, including fines and/or imprisonment and inevitable reputational damage. The penalties vary in each State and Territory of Australia.

Terms of social media platforms

Whatever social media platforms you use for the promotion will generally require you to:

  • comply with applicable State Government trade promotion regulations, including obtaining permits where required;
  • ·obtain a complete release of the social media platform by each entrant or participant;
  • acknowledge that the promotion is in no way sponsored, endorsed or administered by, or associated with, the social media platform;
  • follow its rules on running promotions (for example, Facebook terms state that personal timelines and friend connections cannot be used for promotions); and
  • acknowledge that a person using the social media platform to run a promotion does so at their own risk.

It is also common for a social media platform's terms and conditions to contain terms discouraging:

  • participants creating multiple accounts to enter promotions;
  • businesses from inaccurately "tagging" or "liking" content (which could give rise to misleading or deceptive conduct claims); and
  • business from posting multiple, or duplicate, updates or links to promotions.

Social media platforms' terms and conditions have been known to change, so it is important to check them both when you are creating the promotion and running it.

What other issues need to be considered?

Misleading and deceptive conduct

Promotional materials must be clear and not misleading or deceptive in any way. Given the limitations of social media platforms in layout and length of messages, particular care needs be taken in this respect, because the Court will look at the overall impression given by a posting. Misleading or deceptive conduct in respect of a competition or promotion which breaches the Australian Consumer Law can lead to potential penalties of up to $1.1 million for companies and $220,000 for individuals.

The case of Australian Competition & Consumer Commission v Clarion Marketing Pty Ltd [2009] FCA 1441 provides an example of what can go wrong. In that case, Clarion distributed 10 million scratch and win cards, which invited consumers to scratch to see if they had won a prize by revealing 3 matching symbols. Prizes ranged from a Mercedes-Benz car to electronic goods and a holiday voucher worth $1.00. To claim the prize, a consumer had to text into a mobile premium number. In doing so they found themselves signed up to a premium rate mobile subscription service. However, all the cards were winning cards, but no major prize was won. The Federal Court of Australia found that Clarion had misled consumers. Amongst other problems, "There was ... no luck or chance involved in matching the three symbols. Everyone who played was bound to win a prize".

Privacy

Many businesses will need to comply with Australian privacy principles if they collect and handle any personal information about individuals entering an online competition or promotion.

Intellectual property

Any competition or promotion that allows entrants to post a photo, video or some other form of user generated content needs to be carefully managed because of the risk that use of the material may infringe intellectual property or moral rights of the entrant or some other person.

Defamation

Similar care will need to be taken where a competition or promotion allows entrants to post online comments or information about individuals so as to prevent defamatory material being published in a way that exposes the business to potential liability.

RELATED KNOWLEDGE

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions