Social Media Marketing Series #5: Sweepstakes, Contests, and User Generated Content

Transcription

1 American Bar Association Antitrust Division Private Advertising Litigation, Media and Technology, & Consumer Protection Committees Present: Social Media Marketing Series #5: Sweepstakes, Contests, and User Generated Content February 11, 2013 Presented by: Melissa Landau Steinman, Partner, Venable, LLP Ira Schlussel, General Counsel, eprize, Inc. Mary Kay Andersen, LCA Promotions Manager, Microsoft Corp. Moderated by: Eugene Benick, Finkelstein Thompson LLP

2 Basic Principles Same rules apply to promotions on social media Must comply with lottery and gambling laws Material terms & rules must be posted Follow other laws and regulations for specific types of promotions/claims, e.g., CAN-SPAM, mobile/telemarketing laws, endorsements and testimonials guides, privacy laws Subject to all other consumer protection and privacy laws 2

3 CHANCE Amusement CONSIDERATION Sweepstakes Lottery Contest Free gift offer Prize Which rules apply? 3

4 Sweepstakes and Contests: General Considerations 1. RULES: Required under state and federal law; should be readily available to all participants and clearly set forth the details Include liability disclaimers/releases Required disclosures: odds of winning, eligibility, deadlines, ARV of prizes Some states require posting (e.g., MA, RI); some states also require posting of winners lists Some social media sites require special disclosures 2. Registration and/or bonding Sweepstakes over $5,000 NY and FL ($500 for RI) Amusement contests in AZ 3. Privacy: Use of PII or marketing/data collection purposes; issues under state, federal, international and social media platform rules 4. International considerations 4

5 Free Gifts and Rewards Programs on Social Media Free gift offers and rewards programs are also regulated under state and federal law, but not as strictly Free gifts Clear and conspicuous disclosure of terms, any costs important Cannot raise price of base item to cover price of promotional item Rewards programs Terms and conditions very important Must reserve right to change/modify Notice? Class actions largely unsuccessful (airlines, banks/credit cards) Consumer protection/udtpa Breach of contract Negative option renewal Can create tax issues, possible unclaimed property issues 5 February 8, 2012

6 Prize Promotions and User Generated Content on Social Media: Risk Management and Best Practices While social media/ugc promotions may have many of the same issues as traditional sweepstakes and contests, they can have unique issues as well: Consideration Issues Third party platform rules Voting e.g., cheating and the use of bots Intellectual property Privacy Compliance with FTC Endorsements and Testimonial Guides 6

7 Best Practices for Conducting and Posting UGC Contests Clear and conspicuous disclosures on the site and in the rules Include clear submission guidelines/restrictions and follow them Screen before posting submissions Objective judging criteria Contest phases 7

8 8 Clear and Conspicuous Site Disclosures

9 Submission Guidelines The Submission must be in.jpg format; The Submission must not exceed 5 MB in size; The Submission must contain a title and description; The Submission's title and description must be in English; and The Submission cannot have been submitted previously in a promotion of any kind or exhibited or displayed publicly through any means. 9

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11 Can a UGC contest run afoul of lottery laws? Lottery = Prize, Chance and Consideration Time based consideration to create UGC Image Placeholder Chance in determining winner Draw a winner (break tie) Vote only promotions No objective judges/judging criteria 11

12 Judging Criteria Creativity (33%) Quality of Submission (33%) Image Placeholder Fit to Contest Theme (34%) 12

13 Qualified Judges They must be objective They must be qualified Image Placeholder They must follow the judging criteria 13

14 Public Voting Preventing Fraud and Hacking Include language in your rules: Limit: Each person may vote one (1) time per day during the Voting Phase. Multiple votes received from any person or address in excess of the stated number will be void. Participants are prohibited from obtaining votes by any fraudulent or inappropriate means, including, without limitation, offering prizes or other inducements to members of the public, as determined by Sponsor in its sole discretion. Such votes will be disqualified. Sponsor reserves the right to cancel, suspend and/or modify the Contest, or any part of it, if any fraud, technical failures or any other factor impairs the integrity or proper functioning of the Contest, as determined by Sponsor in its sole discretion. Put in place technology solutions: Won t allow votes to exceed number in rules Identify user by IP address 14

15 CONTESTS: And the winner is... Leaderboards Add sizzle but Increase fraud 15

16 Intellectual Property and Ownership in Entries Rules should include IP releases so that you can post submissions online, reuse/republish as desired Should get signed, written release to use commercially Signed writing required under copyright law Affidavit of eligibility and release for winners Federal E-Sign Act Just ask for the rights you need people can be touchy Rules should be clear : no third party IP Sponsor may want to provide pool of clips for use in creating entry Consider creating FAQs explaining limits Laws also protect web site operators Digital Millennium Copyright Act --need Takedown Policy 16 Communications Decency Act

17 User Generated Content Advertising Litigation Subway v. Quiznos (Doctor's Associates, Inc. v. QIP Holder LLC) Quiznos UGC contest asked entrants to submit: videos comparing a Quiznos sandwich to a Subway sandwich. To generate interest, Quiznos posted user-generated video examples Subway sued Quiznos for false advertising under the Lanham Act, claiming examples contained false and misleading statements Issue: Whether Quiznos was immune to false advertising claims under Section 230 of the CDA: No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. Case settled after court denied Quiznos motion for summary 17 judgment Plot spoiler: (it s what NOT to do)

18 Understand the Social Landscape Each social network has its own set of rules and usage guidelines Make sure your legal team is familiar 18

19 Facebook Rules for Promotions CAN T run a sweepstakes or contest directly on a Facebook page has to be through a third-party application/ on a canvas tab CAN T condition entry on taking action on Facebook, e.g., liking status update or commenting on Wall uploading photo checking into Place CAN T use Facebook functionality as automatic entry mechanism BUT, CAN include certain actions ( liking Page, checking into Place, or connecting to app) as part of entry process CAN T use Facebook features (e.g., Like button) as voting mechanism CAN T use Facebook to notify winners MUST include specific releases/disclosures re: Facebook Facebook not affiliated, sponsor of promotion Data provided is provided to sponsor, not Facebook Releases/disclose in rules and on entry form 19

20 Twitter Promotions Twitter Terms and Conditions discourage creation of multiple accounts; rules regarding retweeting to enter Limit on number of tweets/entries to one per day E.g., don t encourage retweets to win Recommend in tweet entries so will be visible in user timeline Suggest including relevant hashtag topics in tweet entries E.g., #promotion or #companyname) How to provide abbreviated rules? 20

21 Pinterest and Prizing New Marketing Guidelines as of December 2012: Don t: Run promotions that encourage spammy behavior, such as asking participants to comment repeatedly. Run a sweepstakes where each pin, repin, or like represents an entry, or ask pinners to vote with a repin or like. Overdo it: Contests and promotions can be effective, but you don t want to run a contest too often. Suggest that Pinterest sponsors or endorses you: Make sure you don t say or imply this anywhere in your marketing materials or branding. 21

22 Refer a Friend and UGC Promotions/CAN-SPAM Prize promotions with a refer a friend component should be vetted for CAN-SPAM compliance CAN-SPAM may apply if coupons, points, additional sweepstakes entries offered in return for forwarding a commercial , including a social media message Requirements: 1. Opt-out mechanism 2. Sender s physical postal address 3. Disclosure that message is a solicitation ( ADV not required) Prohibitions: 1. False header information 2. Misleading subject lines 3. address harvesting/dictionary attacks 22

23 Mobile Marketing: Social Media Sweeps Now Coming to Your Phone? Three key (intertwined) concepts: Consent: Must have express prior authorization to send text messages Disclosure: How do you make adequate disclosures with limited space? Privacy: What are you doing with the PII you get, how are you disclosing, and how are you getting consent? Who is regulating? FCC FTC: new report on mobile out less than two weeks ago State AGs California AG very active on mobile privacy and regulating apps Florida AG has brought a number of cases, specific disclosure requirements E.g., indicated that price and terms of offer would need to be within 125 pixels of submit field, with other information presented in a minimum font size/color that contrasted with background Industry trade associations Mobile Marketing Association Guidelines 23

24 Text to Win Texting raises unique issues: Are text charges consideration? American Idol/Deal or No Deal Cases Hardin v. NBC Universal, Inc. et al Current thinking: Promotions using standard text messaging charges are probably relatively low risk --although not completely without risk Premium text-messaging promotions are still a challenge. Consider: Free AMOE Offering something of equal value (e.g., free ring-tone, wallpaper, t-shirt) in return for entry 24

25 Questions? 25

26 Thank you! Melissa Landau Steinman, Partner, Venable, LLP Ira Schlussel, General Counsel, eprize, Inc. Mary Kay Andersen, LCA Promotions Manager, Microsoft Corp. Eugene Benick, Finkelstein Thompson LLP 26