Let’s Play! Dos And Don’ts Of Running A Contest In Canada

With excitement surrounding this year’s international soccer tournament now in full swing, individuals and businesses alike are considering how to get in on the action. One common marketing play is to run promotional contests.

A well executed promotional contest can drive meaningful engagement, increase brand visibility and attract audience participation, especially when timed alongside major sporting and entertainment events.

Running a contest is not simply a matter of creative marketing. Doing so requires careful consideration of a range of legal and regulatory frameworks that include competition law, the Criminal Code, trademark law, privacy requirements, Canada’s Anti-Spam Legislation (CASL) and provisions from Québec’s Charter of the French Language. 

Brand owners and businesses seeking to leverage the excitement of a high-profile event must also be mindful of the risks associated with what is commonly referred to as ambush marketing, which occurs when a brand owner attempts to promote its products or services by suggesting an association with a public event such as a sponsorship or endorsement when no such relationship exists. Ambush marketing is particularly prevalent during widely publicized events and is generally viewed as unfair to official sponsors who invest significant financial and organizational resources to secure exclusive rights. More importantly, such practices often give rise to legal risks.

Given the legal compliance requirements and possible risks, businesses should be aware of several key “dos” and “don’ts” when designing promotional contests tied to major events:

• Don’t engage in ambush marketing. Event organizers and rights holders often publish guidelines governing the use of event-related names, logos, slogans, and other protected intellectual property. Businesses that are not official sponsors should avoid any references, whether express or implied, that could suggest an affiliation with the event. Marketing materials, particularly on social media, should be reviewed carefully to ensure that they do not create a misleading impression of a connection where none exists.
• Don’t run an illegal lottery. Canadian law generally prohibits contests that involve three elements: a prize, a chance, and consideration such as a purchase or payment. To avoid being classified as an illegal lottery under the Criminal Code, businesses must eliminate at least one of these elements. A common practice in Canada is to include a skill-testing question for potential winners, and to provide alternative free methods of entry.
• Do ensure adequate and proper disclosure of contest rules. The Competition Act requires that adequate and proper disclosure of contest rules, such as the number and value of prizes, any regional restrictions, and the odds of winning, be provided to potential contest entrants. Short or “mini” contest rules must be provided in advertising, including on social media, as well as at the point of sale. These rules must be available in a reasonably conspicuous manner.
• Don’t unduly delay awarding prizes. It is unlawful under the Competition Act to unduly delay the distribution prizes or benefits for a promotional contest. Prizes should be awarded in accordance with the stated rules and within a reasonable timeframe.
• Do comply with privacy legislation. Collecting personal information such as an entrant’s name and contact information through a contest brings obligations under applicable privacy laws, including Personal Information Protection and Electronic Documents Act (PIPEDA). In Canada, organizations collecting personal information must clearly explain how that data will be used, and ensure appropriate safeguards are in place to protect it against unauthorized access, disclosure or misuse.
• Don’t make false or misleading representations. Statements about the contest must be accurate and not misleading in any material respect. Such statements include representations about the number and value of prizes, the odds of winning, and entry requirements. Non-compliance may result in enforcement action by the Competition Bureau, including administrative monetary penalties.
• Do consider the “general impression” of your promotion. Canadian advertising law looks beyond literal wording to the general impression conveyed to the audience. Images, design elements, disclaimers, and context should be considered in their totalities to communicate a truthful, fair and accurate advertising message.
• Do comply with platform-specific requirements. Several social media and digital platforms publish specific policies and guidelines governing promotions and contests, which may include, for example, prohibiting participants to share, repost or tag others to publicize the contest. These requirements should be reviewed and followed closely.
• Don’t overlook Québec-specific requirements. Contests open to Québec residents are subject to French language requirements under the Charter of the French Language. Compliance in Québec involves extra planning, including ensuring all rules, privacy policies, and advertising are translated into French.

If you are considering launching a contest or promotion tied to a major event, an IP lawyer can assist in reviewing the terms of your campaign, identifying potential risks, and ensuring your materials and the contest mechanics align with applicable Canadian laws and best practices.