Canadian COMPETITION LAW

CONTEST RULES/PRECEDENTS

Do you need contest rules/precedents
for a Canadian contest?

We offer many types of Canadian contest/sweepstakes law precedents and forms (i.e., Canadian contest/sweepstakes law precedents to run common types of contests in Canada). These include legal precedents for random draw contests (i.e., where winners are chosen by random draw), skill contests (e.g., essay, photo or other types of contests where entrants submit content that is judged to enter the contest or for additional entries), trip contests and more.

Also available are individual Canadian contest/sweepstakes precedents, including short rules (“mini-rules”), long rules, winner releases and a Canadian contest law checklist.

For more information or to order see: Canadian Contest Law Forms/Precedents.

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CANADIAN CONTEST LAW & SOCIAL MEDIA

Social media continues to be important for effective advertising and marketing, including in connection with promotional contests/sweepstakes.

Social media platforms, including Facebook, Twitter, YouTube, LinkedIn and Instagram, may be used to promote a contest or be an active part of entry and participation (e.g., following a brand, liking a page, commenting on posts or sharing contest marketing on social media platforms).

SOCIAL MEDIA PLATFORMS
TERMS OF USE

Contest sponsors need to be aware, however, that social media platforms have different terms of use, including in relation to contests, that should be complied with.

These terms of use typically not only apply where a particular social media platform is used as an active means of entering and participating in a contest (e.g., liking a page or tweeting) but also where the platform is merely used to promote or publicize the contest (i.e., hosting contest materials on the sponsor’s social media page(s)).

In addition to general requirements, such as requiring sponsors to comply with applicable local contest laws, many social media sites also have specific terms and conditions including disclaimers required for rules and releases, terms as to whether a purchase may be required to enter and restrictions on using some social media functions for a contest (e.g., terms prohibiting contest rules that encourage spamming for additional contest entries).

For example, Facebook’s Terms and Policies include terms related to Promotions. These include, if you use your page, group or event to announce or administer a promotion (a contest, giveaway or sweepstakes) that you:

“Ensure that your promotion complies with applicable legal and regulatory requirements (e.g. providing entrants a copy of the promotion’s official rules, disclosing offer terms and eligibility requirements, and registering your promotion with the relevant authorities). You must also require participants to (a) fully release and hold Meta harmless from liability, and (b) acknowledge that the promotion is in no way sponsored, endorsed, administered by or associated with Meta. Your promotion must not require or incentivise participants to share, repost, tag others or in any other way publicise your promotion. Note that Meta will not assist you in administering a promotion. Should you use our services to administer your promotion, you do so at your own risk.”

The terms and conditions of other major social media platforms also contain rules, which vary depending on the platform, for running contests, which, if violated, can lead to page takedowns or account suspension.

Social media platforms’ contest related terms of use also change from time-to-time.

As such, contest promoters should check the specific requirements for each social media platform they plan on using before launching a contest to ensure that the contest is compliant with the terms of use.

CONTEST DISCLOSURES
(SHORT AND LONG CONTEST RULES)

Like other contest marketing, it is a good practice to include short rules in all social media marketing (with a link to the long rules).

CONTESTS AND CASL
(CANADIAN FEDERAL ANTI-SPAM LEGISLATION)

Canada’s federal federal anti-spam legislation (CASL) is also often relevant when running contests and promotions in Canada.

This can include if electronic distribution lists will be used to market the contest/promotion, the contest/promotion will include the collection of e-mails for marketing unrelated to administration of the promotion, if participants’ e-mail addresses will be shared with third parties (e.g., related entities or affiliate marketers or influencers) or participants are either asked or incentivized (e.g., with bonus contest entries) to “share” the contest/promotion with friends or family.

Given the potentially severe penalties for violating CASL, which include administrative monetary penalties of up to CDN $10 million, it is important to ensure that CASL is complied with for electronic marketing related to contests or other promotions open to Canadians.

This can include, for example, in the social media context, that “friends and family” type promotions where entrants are either asked or required to share information about a promotion directly with social media contacts (e.g., by sending direct messages), that such promotions do not violate CASL’s rules against sending unsolicited commercial electronic messages without complying with CASL’s consent rules or relying on a CASL exception.

For more information about contests and CASL, see: Contests and CASL and CASL Compliance Errors.

For CASL checklists and precedents that we offer for sale to comply with CASL, see: CASL Compliance Checklists and Precedents.

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CANADIAN CONTEST LAW TIPS

The following are some key legal tips for operating a successful and legal contest in Canada:

Criminal Code. Avoid the illegal lottery offences of the Criminal Code (e.g., include a bona fide “no purchase necessary” entry option and skill element, such as a time-limited, multiple-step mathematical question for potential winners as a condition of awarding prizes).

Short Rules. Include short rules (i.e., “mini rules”) with all of the required Competition Act disclosure requirements for point-of-purchase materials (e.g., print and in-store marketing, social media and Internet sites, packaging and labeling, television and radio spots, etc.). For more information, see: Canadian Contest Law Forms/Precedents.

Long Rules. Ensure that precise long rules (i.e., the official contest rules) are included that reflect the details of the contest, anticipate potential contingencies (e.g., technical problems) and set out the terms of the contest as clearly as possible – for example, eligibility requirements, how to enter, prize descriptions, number and value of prizes, draws and award of prizes, odds of winning and indemnifying and releasing the contest sponsor and any co-sponsors or prize sponsors. In this regard, contests are contracts, and so they should be as accurate, clear and precise as possible in the event issues arise. For more information, see: Canadian Contest Law Forms/Precedents.

Winner Release Forms. Contest sponsors should consider using winner release forms for contest winners. While not required by law in Canada, winner release forms are almost always used by contest sponsors to have winners confirm that they have complied with all contest rules and release the sponsor from legal liability. Signing and returning winner releases is also commonly included in contest rules as a condition of awarding a prize. Winner release forms are particularly important for contests in which there may be higher risk (e.g., where the contest involves high value prizes or a trip prize). For trip contests, sponsors are generally advised to use winner releases for both winners and any travel companions (and guardian releases for any minor companions). For more information, see: Canadian Contest Law Forms/Precedents.

Misleading Advertising. Ensure that advertising and marketing materials are not false or misleading (i.e., comply with the general civil and criminal misleading advertising sections of the Competition Act, under sections 74.01 and 52). In this regard, contests in Canada must comply not only with stand-alone contest provisions of the Competition Act (under section 74.06) but also with the general misleading advertising sections of the Competition Act. It is particularly important to ensure that the marketing materials also matches the contest rules and that all material aspects of the contest (e.g., number and type of prizes, prize values, how to enter and win and any conditions/limitations) are accurately described in the short rules, long rules and marketing materials.

Canadian Anti-spam Law (CASL). Comply with Canada’s federal anti-spam legislation (CASL). CASL is often relevant when running contests in Canada, including if electronic distribution lists will be used to market the contest, the contest will include the collection of e-mails for marketing unrelated to administration of the contest, if entrants’ e-mail addresses will be shared with third parties (e.g., related entities or affiliate marketers) or entrants are either required or incentivized (e.g., through additional entries) to “share” the contest with friends or family. Given the potentially severe penalties for violating CASL, which include AMPs of up to CDN $10 million, it is very important for contest sponsors to ensure that they comply with CASL for any electronic marketing related to promotional contests open to Canadians. For more information about contests and CASL, see: Contests and CASL and CASL Compliance Errors.

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CASL Compliance Checklists and Precedents: For information about the CASL compliance checklists and precedents we offer, see: CASL Compliance Checklists and Precedents.

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Intellectual Property Consents. Consider whether consents are needed (and if necessary obtained) to reproduce third-party intellectual property – for example, trade-marks, logos, etc. – or to transfer ownership in contest materials – for example, where contestants create original material as part of the contest. Contest rules in Canada commonly include rights (e.g., a licence) for the sponsor to use information and content contributed by entrants and if entrants will be contributing original content (e.g., photographs, essays, etc.) it is also a good practice for sponsors to include guidelines relating to their rights to use (or reject) any entrant contributed content. For more information, see: Guidelines for Consumer Generated Content Contests.

U.S. Advice. Seek U.S. legal advice if the contest will be open to U.S. residents or limit the contest to only Canadian residents.

Social Media Site Rules. Comply with social media sites’ terms of use if using social media to promote or host a contest (e.g., Facebook’s Promotions Rules). Also ensure that appropriate disclosures are made in all social media marketing (i.e., include short rules).

Other Competition and Advertising Law Rules. Consider whether other competition or advertising law rules may apply to a contest. For example, in addition to the stand-alone contest provision (section 74.06), the Competition Act also contains provisions governing deceptive prize notices, general misleading advertising (sections 52 and 74.01) and telemarketing that involves prizes.

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SERVICES AND CONTACT

We are a Toronto based competition and advertising law firm offering business and individual clients efficient and strategic advice in relation to competition/antitrust, advertising, Internet and new media law and contest law. We also offer competition and regulatory law compliance, education and policy services to companies, trade and professional associations and government agencies.

Our experience includes advising clients in Toronto, across Canada and the United States on the application of Canadian competition and regulatory laws and we have worked on hundreds of domestic and cross-border competition, advertising and marketing, promotional contest (sweepstakes), conspiracy (cartel), abuse of dominance, compliance, refusal to deal and pricing and distribution matters. For more information about our competition and advertising law services see: competition law services.

To contact us about a potential legal matter, see: contact

For more information about our firm, visit our website: Competitionlawyer.ca