Is Your Facebook Contest Legal?

Just the other day Facebook made some rather major changes to its Terms of Service for business pages, particularly in relation to what you are permitted to do in terms of contests and promotions. I wrote about those changes and got some interesting comments, as well as had some interesting conversations offline about the implications of this.

One discussion centered on the part of the Terms of Service regarding the need for legal language and disclaimers. Under the previous rules, this was easy, because you had to manage your contests and promotions via third party apps, all of which were approved by Facebook, and included the legal language for you.

What legal language, you ask?

Here is an excerpt of the most pertinent information:

1. If you use Facebook to communicate or administer a promotion (ex: a contest or sweepstakes), you are responsible for the lawful operation of that promotion, including:

a. The official rules;

b. Offer terms and eligibility requirements (ex: age and residency restrictions); and

c. Compliance with applicable rules and regulations governing the promotion and all prizes offered (ex: registration and obtaining necessary regulatory approvals)

2. Promotions on Facebook must include the following:

a. A complete release of Facebook by each entrant or participant.

b. Acknowledgement that the promotion is in no way sponsored, endorsed or administered by, or associated with, Facebook.

Now, if you are going to run a Facebook contest on your Business Page Timeline, as approved by the new rules, it can be rather cumbersome to throw all that language in at the end of a post or update. But it’s still necessary.

One of the folks who weighed in was my friend Steve O’Donnell , who happens to be a patent attorney and deals with issues of intellectual property, and the like. Steve confirmed that, yes, you should include that pesky legal language. And while this is his opinion and not professional legal advice tailored to your specific situation (which you can pay him for), he believes that perhaps you could put this language somewhere in the “About” section of your Facebook page, as long as you refer to it with a link or state something obvious like,

See the “About” section of this page for sweepstakes rules.

He then mentioned that while you’re at it, you should call it a sweepstakes if it’s a sweepstakes and a contest if it’s a contest.

Say what?

Well that opens up another can of worms. Steve is good at that. Opening worm cans. Which brings me to the real point of this post. Facebook’s ToS refers to different types of promotions, specifically contests and sweepstakes. But what’s the difference? I asked Steve to weigh in with his legal knowledge and professional opinion on all of this, and here is what he came up with:

Facebook has recently changed it’s stance of running promotions on business pages. I’ll let Ken comment on FB’s rules since that’s his purview and since their rules are a moving target. I want to explain the common terms because they’re commonly misused.

Generally, there are three types of promotions that get confused: Contests, Sweepstakes, and Lotteries. And although the actual structure of the promotion is more important than the term used to describe it, using the proper term and knowing the difference can prevent the unpleasant gaze of an Attorney General.

Contests pit applicants against each other in tests of something. A promotion in which the best haiku wins a prize is a contest. Baseball is a contest. Thunderdome is a contest. An essay on why some detergent is better than another detergent is a contest.

Contests usually get the most lax legal scrutiny, unless they’re rigged. Remember the movie Quiz Show? Don’t do that.

Sweepstakes are free giveaways. The most famous sweepstakes is probably the one from Publisher’s Clearing House. You don’t necessarily have to buy a magazine subscription to be entered, just send in a card. This is also the kind of thing you find on promotional boxes of cereal, cans of ready to eat pasta, yogurt lids, etc. If you read the rules for those, you can enter your name in a way that doesn’t require that you buy cans of ravioli (although they’re delicious). A sweepstakes winner is randomly chosen from the entrants.

A sweepstakes is almost certainly what is intended by a Facebook promotion of this type. Sweepstakes also get fairly lax scrutiny from legal authorities unless they’re really lotteries…and that’s just fine enough of a distinction to get people in trouble.

Lotteries are like sweepstakes in that the winner is chosen randomly, but it costs something to enter the contest. The legal term for this cost in ‘consideration.’ A state run lottery might be the best known example, but in most places, certain types of charities can also run a lottery, usually only after having an application approved by the state. All those charitable raffles you’ve entered are…or well, should have been…state approved lotteries.

Lotteries are very tightly controlled. Holding a lottery without the appropriate approval is just asking for trouble.

The question is if asking for a Facebook ‘like’ is enough consideration to turn a sweepstakes into a lottery. Certainly a ‘like’ has some value, or no one would ask for one. However, the value of an individual like is probably a threads breadth more than zero. Similarly, the value given for a like is some tiny fraction of that same threads breadth. Additionally, someone can un-like a page at any time. So, any consideration is de minimus and fleeting.

I can’t imagine a situation where a FB sweepstakes would be found by a court to really be an illegal lottery, but I’m sure some business will try to skirt around the rules and become a problem.

Don’t be that business.

So that’s what Steve has to say. So as you move forward with any sort of contest on Facebook, or any social media platform, for that matter, be mindful of these different types of promotions and what they mean.

What are your thoughts on the legal definitions above and how they apply to promotions on Facebook?

via Business 2 Community http://www.business2community.com/facebook/facebook-contest-legal-0599987?utm_source=rss&utm_medium=rss&utm_campaign=facebook-contest-legal