In Italy 'prize contests' fall into the category of
sales promotions, governed by a special Regulation (i.e.
Presidential Decree no. 430 of 2001) and subject to supervision and
control of the Ministry for Economic Development. Such Regulation
governs local promotional initiatives "... of any kind,
when consisting in promises of premiums to the general public and
aimed both, at promoting, within the territory of the State,
awareness about products, services, companies, brands, logos or
trademarks as well as sales of certain products or supply of
services, ...". It also sets a list of exemptions with
respect to certain initiatives not subject to the legal and
administrative requirements usually applying to sales
Among other cases (e.g. when prizes awarded consist in items of
minimum value, i.e. gadgets such as a flag, a key ring, a pocket
calendar, etc.), this exemption list refers also to
"...contests announced for the production of literary,
artistic or scientific works,as well as for the
presentation of projects or studies in the areas of commerce or
industry, where prize awarding to the author of the selected
project is meant to reward the service or work performed or to
acknowledge personal merits achieved or to result in an
encouragementin community's collective
In the past, the State Department used to take the view that
promotional initiatives consisting in 'contests', based on
participants skills (e.g. in preparing and submitting a story, a
video or other materials, commonly known as 'user generated
content') had to be considered as 'ordinary
promotions', subject to all the legal and administrative
requirements set in Presidential Decree no. 403 of 2001.
Recently the State Department's offices seem to have changed
their mind on this specific aspect. In a memorandum, published a
few weeks back, they have signaled a new approach to the
advertising and marketing industry. The State Department reminds
that already in the past 'prize contests' requiring
participants to submit content created on their own in order to
achieve a chance of winning a prize resulted covered by the
exemption on condition that:
No purchase was required for
participating to the contest,
Prizes assigned to winners were
intended to reward "the service or work performed or to
acknowledge personal merits achieved or to result in an
encouragement in community's collective interests
..." (as to the latter case, the memorandum cites the
following examples: an article or essay on topics such as tobacco
dependence, drug addiction, chronic alcoholism, ecology, a
particular individual literary talent – e.g. skills in the
use of ancient Latin – or a paper on topics of social
In its November memorandum the Department acknowledges that
several big companies – doing business on a multi-national
level and active in the sector of information technology –
had flagged their discomfort in relation to promotional
initiatives/skill contests, not linked to a purchase, but
soliciting participants to submit their individual projects or
studies for developing technological solutions or applications and
rewarding the best contributions received with prizes, meant to
acknowledge authors' personal merits or to encourage submission
in the community's collective interest. While such
contributions could theoretically be assigned to a 'commercial
or industrial context', promoters usually restrain from
undergoing any specific obligation as to actual use of the
technological solutions submitted by participants. The uncertainty
surrounding such initiatives as to their compliance obligations
with the requirements laid down in Presidential Decree (or as to
coverage by the exemption provisions set in Article 6) frequently
had induced international companies to exclude Italian residents
from participation to such skill based prize contests.
Without any further explanation on the legal basis of its view,
the State Department's offices now indicated that the
above-mentioned initiatives are to be considered as covered by the
exemption from the legal and administrative requirements set by
Presidential Decree no. 430 of 2001 for sales promotions.
So far, so good, but unfortunately the State Department's
'explanatory memorandum' leaves the marketing industry with
a (not exactly helpful) case-by-case approach, without much needed,
clear and easy to understand indications on how to handle prize
contests based on user generated content.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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