There are various rules and regulations that govern the running of competition and giveaway promotions in Australia. With the advent of social media as a platform for running these competitions it is important to be aware of, and abide by the numerous rules that apply. This blog is not designed to be a comprehensive description of all the rules that need to be adhered to on the running of competitions, as the individual circumstance will vary in each case. Rather, we hope it provides a broad overview of some of the issues to consider when running a competition.
In all competitions, no matter the form, it is very important to be honest in dealings with the public. The new Australian Consumer Law (ACL), which is contained in a Schedule to the Competition and Consumer Act 2010 (the new name for the Trade Practices Act 1974), deals with giveaways and competitions at s32. This section sets out the provisions in relation to competitions specifically. It states that promoters, advertisers and sellers need to honour any promises made to give gifts or provide prizes or provide other free items or services.
There is also a section within the ACL that deals with misleading and deceptive conduct which applies to all dealings with consumers, not just in a competition sense. This section, as the name states, prohibits businesses from engaging in behaviour which actually, or is likely to, mislead or deceive. This can cover a wide range of circumstances and may include lying to consumers, leading them to a wrong conclusion, creating a false impression, leaving out or hiding important information or making false or inaccurate claims.
In addition to this, there may be various laws which govern the running of competitions in each state. In NSW for example, NSW Fair Trading investigates competitions or offers where businesses have no intention of providing any prizes. The running of trade lotteries and games of chance is governed by the NSW Office of Liquor, Gaming and Racing. Briefly though, these two bodies require that traders disclose the terms and conditions of their competition. These terms and conditions need to be provided before the gift or prize is made available to the customer. Also, the trader needs to ensure that they are not ‘disguising’ the cost of the free gift or prize by including it in a selling price, and needs to supply goods that are the same as those offered. Traders need to apply through the NSW Office of Liquor, Gaming and Racing to be granted a licence to hold a competition.
Social Media Competitions.
There can be a tendency to think that competitions held on social media are not held to the same standard as those that are not. It is wrong to think this way, as all the standard rules outlined above still apply. In addition to these rules though, each individual platform may have its own set of rules that it requires promoters to abide by also. For example, Facebook has a ‘Promotions Guidelines’ document which requires, for example, that Facebook is fully released from any legal action as a result of the running of a competitions and a statement that prohibits the use of the ‘Like’ button as a voting mechanism for a promotion. It is important to read and understand these policies prior to mounting a competition on a social media platform.