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“Winner Winner Chicken Dinner” – The law and Online Competitions
Picture this: a small business owner launches an online contest offering a luxury weekend getaway as the prize.
The rules seem straightforward—like and comment on a social media post to enter. The campaign generates a buzz, drawing hundreds of participants and boosting their profile. But just as the winner is announced, the organiser receives an email from regulators. As it turns out, the contest required a permit they didn’t obtain. What started as a marketing triumph now threatens to spiral into a legal compliance nightmare.
Online competitions have become common for marketing purposes, particularly on platforms like Instagram, Facebook, and Twitter.
But as these digital contests evolve, so too do the legal and regulatory frameworks governing them.
If you are considering running a competition, you should consider legal advice so that you do not unintentionally break the rules.
Skill vs Chance
In Australia, competitions fall into two categories: games of skill and games of chance.
The distinction can determine whether you need a permit.
A game of skill, such as “explain in 25 words or less why you love our product,” are treated differently to a game of chance, like a random prize draw or lottery, typically demands a permit depending on the prize value and the state or territory. Also, each State and Territory in Australia has a different set of laws.
Add to that another lawyer – if your competition is being run over social media, these platforms have specific guidelines for competitions, reflecting both legal requirements and their own risk management policies.
For example, a competition must release Instagram from any responsibility, make clear that the contest is not sponsored by the platform, and prohibit inaccurate tagging (e.g., tagging people not in a photo).
Twitter discourages actions like creating multiple accounts or spamming tweets, and so on.
The choice of prizes can impact not just participation but also compliance. Incentives like vouchers, free items, are popular, and if you have prizes they need to comply with Australian Standards.
Privacy considerations arise as entry forms often require personal data.
Consult a legal professional to draft robust terms that comply with both state laws and platform policies.
Why Choose Sharon Givoni Consulting?
At Sharon Givoni Consulting, we understand the nuances of Australian competition law and social media guidelines. Whether you’re a business owner planning your first Instagram giveaway or a seasoned marketer running multi-state campaigns, we offer clear, practical advice tailored to your needs.
Protect your brand and stay compliant.
Please note the above article is general in nature and does not constitute legal advice.
Please email us info@iplegal.com.au if you need legal advice about your brand or another legal matter in this area generally.