Social Media Competitions can be a great way to collaborate with other businesses and cross pollinate your audience, with a view to grow your own followers and generate more sales.
There are however a few things from a legal perspective you should consider before running your competition.
What is a social media competition?
Social Media competitions are competitions run through social media platforms, such as Facebook or Instagram. They often involve some degree of interaction with a business’ social media account. The goal of the business in conducting the competition may be any number of things, such as to increase sales, build brand awareness, increase followers or grow an email list. Social media users generally enter competitions with the hope to win a certain prize.
Types of social media competitions
Not all social media competitions are the same. There are two common types of competitions conducted on social media. These are:
- Game of Chance – Where the winner is drawn at random from a group of eligible participants (for example, drawing a name out of a hat or utilising random selection tools). These types of competitions are usually very quick and easy to enter and require little time to be invested by the business in selecting a winner; and
- Game of Skill – Where the participants are required to submit something which is then judged on its merit to determine a winner (for example, an entry might include writing an essay on a certain topic or taking and submitting a relevant photo). These types of competitions take a lot more time and energy in submitting entries and determining winners.
The type of competition conducted often depends on what the business intends to achieve in conducting the competition. For example, conducting a game of skill may generate more useful user generated content for the business than conducting a game of chance.
Depending on the specifics of the social media competition conducted, the competition may be caught by regulations in each of the States and Territories of Australia relating to trade promotions. Trade Promotions are essentially free-entry competitions run to promote the goods or services supplied by a business.
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Legal requirements for social media competitions
If you wish to conduct a social media competition, you may be required to meet various legal obligations. Depending on the type of competition you are conducting and in which State or Territory you are conducting it, these may include:
- Obtaining suitable permits / authorities where required;
- Complying with the relevant laws in relation to advertising and promotion of the competition;
- Complying with the social media platform terms and conditions;
- Adopting and making available to participants of your competition, a set of terms and conditions for the competition and ensuring they are followed by both the participants and the organisers (for example the business arranging the competition) and promoters (for example any influencers);
- Managing the privacy of the participants (you may need to adopt a privacy policy);
- Keeping necessary records;
- Ensuring that the prize for the competition is not a prohibited prize (such as tobacco, certain liquor prizes and weapons); and
- Complying with draw supervision requirements where the prize exceeds a certain value.
When considering whether you will need to apply for a permit / authority and, if so, which permits / authorities you will need to apply for, you will need to first determine:
- The type of competition that you are intending to conduct;
- Any entry conditions;
- The total prize value; and
- The States and / or Territories of Australia in which you are conducting the competition.
It is also important to carefully consider your intended social media competition to ensure that it is not likely to be found to be misleading or deceptive. Competitions that are found to be misleading or deceptive can result in significant penalties for the organisers and promoters.
You should consider the above and take any necessary steps before you announce your competition on social media.
Social Media Platform T&C considerations
Organisers and promoters should always ensure that they check the terms of the social media platform on which they are running the competition. Each platform has its own set of terms and conditions and these are subject to change at any time.
Before running any competition, organisers should revisit the terms and conditions for that platform to ensure that they are complying with the current provisions. Different rules apply on each platform, and what is permitted on one, may not be permitted on another.
The legal T&Cs for your social media competition
Regardless of whether you intend to conduct a game of skill or a game of chance, you will need to create a set of terms and conditions for your competition. Here’s some of things they should cover:
- Name the organisers and promotors of the competition;
- Set out the eligibility requirements for entry (for example, that they must be located within a certain geographical location);
- Set out dates and times on which the competition will open and close;
- Clearly detail how to submit an entry and whether more than one entry can be submitted;
- Identify the prize and its total value;
- Advise how and when the prize will drawn, how and when it will be announced and how and when it will be made available to the winner;
- The procedure which will be followed if the winner fails to claim the prize within the required timeframe;
- Whether any terms and conditions apply when claiming the prize (for example where the prize is a free service, any terms and conditions that apply in respect of that service);
- Include any disclaimers or acknowledgements required by the terms of use for the social media platform (for example that the competition is in no way sponsored, endorsed or administered by, or associated with the platform);
- Identify any prohibited actions by participants, such as entering the competition through multiple “fake” accounts, providing multiple entries where that is otherwise prohibited or providing false information in the entry;
- Include any rights to disqualify participants (for example, where they fail to comply with the terms and conditions);
- If one has been obtained, set out the permit / authority number; and
- State your privacy policy or include a link to where it can be found by participants.
Each of the States and Territories of Australia have their own requirements in relation to what must be contained in the competition terms and conditions. When preparing your terms and conditions, you should ensure that you consult the requirements in the relevant States and / or Territories in which the competition will be conducted.
If your competition involves a game of skill, you should also address matters such as the use of participant’s intellectual property, liability for improper use of third party intellectual property as well as dealing with the costs and expenses of preparing entries.
The terms and conditions should be clearly advertised and readily available to participants. If the full terms and conditions cannot fit within the caption of a social media post, participants should be directed to where they can view the full terms and conditions, such as on an easily accessible page of the organiser’s website.
What if you don’t comply with your legal requirements?
The penalties can be significant where an organiser or promoter fails to meet its legal requirements in relation to competitions. Aside from the obvious reputational damage that an organiser or promoter may suffer, they may also face fines and / or imprisonment depending on the relevant State and / or Territory and the requirement with which they have failed to comply. An organiser and / or promoter may also face loss of their social media account where they have failed to comply with the platform terms and conditions of use.
Where to start
Before running a social media competition, we recommend obtaining legal advice in relation to your specific competition. You can contact us for assistance and advice for obtaining permits, drafting your competition terms and conditions, drafting your privacy policy and conducting your competition.
You can find some further information on trade promotions in each State and Territory as well as permit application forms by clicking the following links:
Contact us to discuss your legal requirements for social media competitions
Information contained within this blog post is intended to be general information only and is not in any way intended to constitute legal advice. You should not act or rely on any information found in this blog post without obtaining prior advice specific to your circumstances.
