giveaways - giveaway legal rules

What are the rules and regulations that brands and influencers need to be aware of when running competitions or giveaways on social media?

If you launch a free prize giveaway or competition on social media, there are several things you need to do before sharing the giveaway post on your feed to avoid having the post taken down, or having action taken against you. This article sets out the rules, regulations, and terms that you need to consider and comply with before running a giveaway or competition on social media.

Giveaways and legal responsibilities – where to start?

A key starting point is to make sure that the post and any videos, reels, stories, IGTVs promoting or endorsing the same, complies with both the relevant social media platform’s terms and conditions and the relevant advertising and promotional marketing rules and regulations.

The Advertising Standards Authority (ASA) recommend that promoters take legal advice before embarking on promotions with prizes, including competitions, prize draws, instant-win offers and premium promotions, to ensure that the mechanisms involved do not make them unlawful lotteries under the Gambling Act 2005.

The individual running the giveaway is responsible for all stages of the competition and the giveaway must be suitable for the target audience; a social media platform’s insights and/or analytics tools can help you determine the age range of your followers and therefore, who your target audience is.

There are some key things to remember when running a competition or giveaway on social media:

#1 – Key information included in the initial giveaways post

Participants must be able to make an informed decision as to whether to enter the competition. Key information such as all rules, entry instructions, restrictions, start date and end date, and terms and conditions should be clear and understandable by the intended audience. Further, the promoter’s full name and correspondence address must be stated. and this information must be included in the initial or main giveaway/competition post.

#2 – Participants must be able to access full terms and conditions before entry

The initial or main giveaway or competition post must state that terms and conditions apply and must be easily accessible by participants, for example through a link. Terms must not be changed at any point during the competition.

We appreciate that it is not possible to include a link in an Instagram caption. However, directing followers to the appropriate website and/or including the link in your Instagram bio for the duration of the giveaway or competition may be a helpful action to take to ensure that your followers or participants are fully informed of the terms of the giveaway/competition.

#3 – Participants must be dealt with fairly to avoid unnecessary disappointment

The individual running the giveaway or competition must deal with participants fairly to avoid unnecessary disappointment. An individual must be able to show that all participants who enter their competition correctly (in accordance with the rules) will have the chance to win and that a reliable method of collecting entries is used.

Phrases such as “subject to availability” do not relieve the individual of their obligation to avoid unnecessarily disappointing participants.

Individuals need to ensure that their competition is not open to abuse or harm as this may mean participants who entered fairly will be disadvantaged. Also, stopping the giveaway because there was a lower than expected response or excluding entrants is unacceptable.

#4 – Winner picked at random

The selection of the winner must be done at random. This can be done by using a computer process, by an independent person or by supervision of an independent person to ensure it is done fairly. The individual must also make sure that they are complying with data protection laws throughout this process.

#5 – The prize must be awarded

The prize must be awarded as soon as possible and typically within 30 days of the announcement of the winner.

If the original prize becomes unavailable or a prize provided backs out, a reasonable equivalent must be offered and there cannot be a cost to claim the prize. Appropriate steps must be taken to inform the winner. The ASA deemed that ringing the winner once is not sufficient, so it is likely that announcing the winner only once on social media will also be insufficient.

Using Influencers to promote giveaways

When using an influencer to promote or endorse goods and/or services online, it is important that the relevant laws and applicable regulations are complied with. This minimises any potential damage to your brand’s reputation.

Having a proper comprehensive influencer contract in place is a step in the right direction to minimising your brand’s exposure to reputational damage.

It is highly recommended for an influencer contract to be put in place when using an influencer to promote your online giveaway or competition. Our expert influencer marketing legal team can provide a bespoke contract to ensure that you have options, control and/or remedies if the influencer does not perform their contractual obligations and/or fails to comply with consumer protection law, the ASA, Committees of Advertising Practice (CAP) or Competition and Markets Authority (CMA) guidance.

Regulated Products

Some categories of products, such as alcohol, those for children, weight-loss, food supplements, beauty and cosmetics and more, are more heavily regulated meaning certain additional advertising rules apply. Check out this article on advertising alcohol on social media for more information.

Brands and influencers should seek legal advice before launching competitions and/or giveaways to ensure that they are not unlawful and in compliance with the relevant promotional advertising regulations. Brands that work with influencers who do not follow the appropriate advertising rules risk reputational damage, which is why it is important to have a comprehensive influencer contract in place which sets out clear reputational controls, amongst other key terms.

At Stephens Scown, we advise influencers, brands and influencer agencies. We have expertise on all aspects of online advertisement, including social media marketing and drafting bespoke influencer promotion and brand endorsement contracts to ensure that both parties are best protected.