How To Run A Legal Social Media Campaign

Many companies are using social media sweepstakes and contests, as promotional tools (there is a difference!). Some are done by in-house employees, but the majority of campaigns are either run by social media influencers or done as part of the services offered by public relations and consulting firms.

Who do you think is on the hook if a company, influencer, or PR/consulting firm fails to conduct a legal campaign? The answer is a no-brainer to the authorities, its the sponsoring company in each case because companies have an obligation to monitor what third parties do on their behalf.

Running a legal online promotion is not tricky, but noncompliance can be costly. Below are 5 essential things to consider before launching a social media campaign. Make sure you read to the end to have the opportunity to enter an actual sweepstakes!

1. IS YOUR CAMPAIGN A SWEEPSTAKES OR A CONTEST? 

In the eyes of the law, your campaign is a sweepstake, contest, or illegal lottery!

• A sweepstakes is a promotion that anyone who validly enters has a free chance to win a specific prize. Breaking this down, a person does not need to pay or purchase anything to enter; the winner is randomly selected based on chance, and an identified prize of value will go to the winner. It has nothing to do with skill.

For example, the following promotion is considered a sweepstakes according to most state laws:

1. Create a Playlist in your TIDAL account;
2. Share your Playlist on Twitter and include the hashtag #sweepstakes to enter;
3. A winner will be randomly selected on September 15 and win two free tickets to a Beyoncé/Jay-Z concert.

• A contest is a promotion or competition that requires a person to use a particular skill, knowledge, or ability, and the winner of the prize is selected based on his or her ability. It has nothing to do with chance.

For example, the following campaign by a company is considered a contest according to most state laws:

1. Create a video that contains your best Beyoncé and Jay Z impersonation;
2. Post it, follow us, and add the hashtag #Contest to enter;
3. The owner of the video that has the most likes on September 15 wins two free tickets to a Beyoncé/Jay-Z concert.

• An illegal lottery is a campaign that has (whether or not intentional) the elements of chance, a prize, and requires entrants to pay or give some kind of consideration to enter. This is apparently what you want to avoid. It is not likely that a campaign that is intended to be a contest could accidentally morph into a lottery because as long as skill is required, the element of chance is not present. However, a sweepstakes can inadvertently require entrants to give or do something that could be considered “consideration” according to the law, which would make it an illegal lottery. This is why you have legal review your campaigns before making them public!

2. WHAT ARE YOUR CAMPAIGN RULES?

Your campaign should include specific rules to avoid problems, such as a complaint by an entrant that it is unfairly run. One complaint to a federal or state authority could quickly get you fined.

Federal law requires some campaigns to have specific conspicuous language (i.e., capitalized). Campaigns should also explicitly specify the details of the promotion. Generally, the following will be of interest to entrants:

• Eligibility requirements (i.e., age, citizenship, geographic location)
• How to enter
• Entry limitations (i.e., 1 entry per household)
• Beginning and end dates and times
• Identify the prize and details, such as its pecuniary value
• State the odds of winning or at least something like “odds of winning depends on the number of entries received”
• Winner information, such as when the winner is chosen, how the winner is notified, and how the winner can claim his or her prize.

This is just an example list. A complete list would depend on your specific campaign.

3. ARE YOU SURE YOUR SWEEPSTAKES IS NOT AN ILLEGAL LOTTERY?

Many people interchange the words “contest” with “sweepstakes,” but, as stated above, it is critical to know the difference. A sweepstakes contains the elements of prize and chance, so if a person is required to pay or give something of value to enter then the law will consider your campaign an illegal lottery. It is generally accepted that the availability of a “free method” of participation that places all entrants on equal footing avoids the problem of consideration in a sweepstakes (i.e., NO PURCHASE NECESSARY).

4. DOES YOUR CAMPAIGN COMPLY WITH STATE, FEDERAL, AND INTERNATIONAL LAWS?

Federal agencies with jurisdiction to regulate sweepstakes and contest promotions include the Federal Trade Commission (“FTC”), the Federal Communications Commission (“FCC”), and the United States Department of Justice (“DOJ”). Federal law is mostly directed toward prohibiting false, deceptive or unfair acts related to advertising a promotion.

Most state laws regarding sweepstakes and contests are also geared toward preventing false, deceptive, or unfair acts and are widely similar; however, certain states are stricter than others. New York, Florida, Texas, and Rhode Island have the most stringent laws in the U.S., such as registration requirements where the approximate retail value (ARV) of a prize exceeds a specific dollar amount, or the campaign is connected to a retail establishment. 

If you are accepting entrants from outside the United States then you may have other laws to consider, such as the General Data Protection Regulation (GDPR) that applies to people located in the European Union.

5. DOES YOUR CAMPAIGN COMPLY WITH THE HOSTING PLATFORM’S RULES AND REGULATIONS?

In addition to legal concerns, you must comply with the rules and regulations for the social media platform that you are using to run your campaign. For example, Instagram requires you to state that it is not responsible for, sponsored, endorsed or administered by, or associated with your contest or what happens during. Here is a link so that you can see precisely what Instagram requires.

Lastly, be aware that it is not a good idea to change your sweepstakes rules after it has started. This could trigger potential penalties or fines.

– Richard B. Jefferson, Esq.

Disclaimer: Nothing stated in this blog is intended to be, or shall be considered, legal or other professional advice. To properly run a social media campaign you need to have a competent attorney assess your specific situation. Also, note that all of the disclaimers to this site also apply.