Promotions, Sweepstakes & Contests

Radio and television stations, as well as their audiences, have reason to celebrate. Last week, the Federal Communications Commission (FCC) announced significant updates to its regulations regarding the disclosure of material terms associated with promotional contests and sweepstakes conducted by television and radio broadcast stations. Since 1976, Section 73.1216 of the FCC rules (the Contest Rule) required broadcast stations that advertised its contests and sweepstakes to the general public to disclose the material terms on air. These on-air disclosures typically have taken the form of very rapidly recited terms at the end of the broadcast announcing the contest or extremely small print found at the bottom of the television screen.  In an attempt to give broadcasters more flexibility in meeting their disclosure obligations and adapt to changing consumer expectations in the Internet Age, the FCC has updated the Contest Rule to allow broadcast stations to disclose material contest and sweepstakes terms on a readily accessible public website.

Under the revised Contest Rule, television and radio broadcasters that choose to disclose material terms of contests and sweepstakes through a website must do the following:

  • Provide the terms on a “publically accessible” website (i.e., designed to be available to public 24/7, free of charge, with no registration requirement);
  • Broadcast the relevant website address periodically on air, providing sufficient information for a consumer to find the terms easily. Broadcasters can meeting this requirement by mechanically reciting the website address as it appears in a browser (e.g., http-colon-backslash, etc.”) or using simple instructions (e.g., “for contest rules go to kxyz.com and then click on the contest tab);
  • Provide a conspicuous link or tab on the broadcaster’s home page, labeled in a way that makes clear its relation to contest or sweepstakes information;
  • Maintain the material terms on the website for at least 30 days after the contest or sweepstakes has ended;
  • Where the material terms of contest has changed, announce that the terms have changed on air within 24 hours and periodically thereafter, and direct participants to the website to review the changes;
  • Ensure that the material terms disclosed on the website conform in all substantive respects to the contest or sweepstakes terms broadcast over the air.

While discussing the updated regulations, the FCC affirmed its commitment to the core principles of the Contest Rule and reminded broadcasters that regardless of the medium of disclosure, broadcasters must provide complete, accurate and timely information about the contests they conduct, ensure that such information is not false, misleading or deceptive, and conduct their contests substantially as announced or advertised.

Is a social media promotion part of your organization’s branding plans? Please join Julia Jacobson (McDermott partner and Of Digital Interest editor) and her co-panelists next Tuesday, July 28, 2015, at 2:00 pm for “Sweeps, Contests & Games in Social Media”. The webinar, the second in a three-part series hosted by the Brand Activation Association (a division of the Association of National Advertisers (ANA)) will explore endorsement, intellectual property and privacy legal issues, as well as the practical aspects of balancing brand wants with compliance needs and participation verification and fulfillment.

For more information, please click here.

In 2014, regulators around the globe issued guidelines, legislation and penalties in an effort to enhance security and control within the ever-shifting field of privacy and data protection. The Federal Trade Commission confirmed its expanded reach in the United States, and Canada’s far-reaching anti-spam legislation takes full effect imminently. As European authorities grappled with the draft data protection regulation and the “right to be forgotten,” the African Union adopted the Convention on Cybersecurity and Personal Data, and China improved the security of individuals’ information in several key areas. Meanwhile, Latin America’s patchwork of data privacy laws continues to evolve as foreign business increases.

This report furnishes in-house counsel and others responsible for privacy and data protection with an overview of key action points based on these and other 2014 developments, along with advance notice of potential trends in 2015. McDermott will continue to report on future updates, so check back with us regularly.

Read the full report here.

For those Of Digital Interest readers attending the Brand Activation Association’s (BAA) 36th Annual Marketing Law Conference, please join McDermott partner – and Of Digital Interest editor – Julia Jacobson as she moderates a panel titled “New and Unexpected: Developments in Mobile Marketing – Mobile Tracking, Apps and Mobile Payments.” She will be joined by Ira Schlussel of HelloWorld, Inc., Paul Twarog of Google Inc. and co-moderator Terese Arenth. The panel session starts at 3:20 pm on Thursday, November 6.  We hope to see you there.

We are pleased to present this inaugural post of the Digital Marketing Minute.  Each week will provide a short post on some news in the digital marketing world.   This week’s post is about a change on Facebook’s platform that affects how marketers conduct promotions.

In an August 7 post on its Developers blog page, Facebook announced that, effective November 5, 2014, use of a “Like Gate,” which requires Facebook users to “Like” a page before participating in a brand’s promotional activity, is not allowed.  In other words, marketers cannot require consumers to “Like” a brand page before entering a sweepstakes or a contest, participating in an offer or accessing certain content.

Facebook reasons that banning the Like Gate will help “ensure quality connections and help businesses reach the people who matter to them” and that consumers “’Like’ pages because they want to connect and hear from the business, not because of artificial incentives” (see https://developers.facebook.com/blog/post/2014/08/07/Graph-API-v2.1/).

New technologies have made offering consumer promotions even easier for businesses but complying with the myriad laws, rules, regulations, industry standards and platform requirements is still challenging.  To learn how to avoid 12 common promotion execution traps, join McDermott’s Julia Jacobson today (Wednesday, June 25) for “Executing a Sweepstakes, Contest or Game,” the second of a six-session “Wednesday Webinars” series hosted by the Brand Activation Association.

For details and to register, click here.  If you are not able to join the live webinar, please visit Of Digital Interest again soon to download the program materials, or contact Julia Jacobson.

The Federal Communications Commission (FCC)’s Report and Order 12-21 (Order 12-21), issued in February 2012, describes revised telemarketing rules that became effective during the past 12 months.

The FCC’s telemarketing rules are issued under the Telephone Consumer Protection Act (TCPA) and apply to a telephone call to a residential landline or wireless number or a text message that is initiated for advertising or telemarketing purposes and uses an “automatic telephone dialer system” (ATDS) or an “artificial or prerecorded” voice message.

The three major changes implemented during the past year are:

(i) Abandoned calls rule effective November 16, 2012: Telemarketers must ensure that no more than three percent of calls answered by a person are “abandoned” (i.e., not answered by the telemarketer within two (2) seconds after the called person answers) during a 30-day calling campaign period;

(ii) Opt-out mechanism effective January 14, 2013: Artificial or prerecorded telemarketing messages must include an automated, interactive mechanism that enables the called person to opt out of receiving future prerecorded messages; and

(iii) Prior express written consent rule effective October 16, 2013: “Prior express written consent” (as described below) of the called person is required[i] for:

  • telemarketing calls to a wireless telephone number when an artificial or prerecorded message or ATDS is used;
  • telemarketing text messages sent using an ATDS; or
  • telemarketing calls to a residential landline telephone number using an artificial or prerecorded message.

“Prior express written consent” means a written agreement signed by the called person that clearly authorizes delivery of advertising or telemarketing messages using an ATDS or an artificial or prerecorded voice message and clearly states that agreeing is not a condition of buying any product or service.  A written agreement may be “signed” electronically using any method recognized under the federal Electronic Signatures in Global and National Commerce Act (E-SIGN Act) or applicable state contract law.  The E-SIGN Act recognizes a signature as an “electronic sound, symbol or process” that is “attached or logically associated with” an agreement and “adopted by a person with the intent to sign.”

Although industry standards have required express opt-in consent for recurring text messaging programs prior to implementation of the FCC’s prior express written consent rule, consent obtained under the old regulatory framework is not sufficient under the new FCC consent rule because (among other requirements) the “agreement” to which the consumer consents (i) must include reference to use of automated technology and (ii) “must be obtained without requiring, directly or indirectly, that the agreement be executed as a condition of purchasing any good or service.”

Action Step for Marketers: Obtain New Opt-in Consent for Telemarketing and Mobile Marketing

Obtaining new opt-in consent consistent with the requirements of the new FCC consent rule is best practice because the sender bears the burden of proving that it has obtained prior express written consent that meets the FCC standards.  Relatedly, implementation of a record-keeping system through which evidence of compliant consent is retained for at least three years (i.e., the statute of limitations for contract claims) after the consumer opts out or after sending the last text message related to the consumer consent.

Read “Part 1:  Children’s Online Privacy Protection Act Amendments.”


[i] The FCC does not require prior express written consent for non-telemarketing calls and health-care-related calls subject to the Health Insurance Portability and Accountability Act (HIPAA) that are made to residential lines but prior express consent is required for such calls or text messages made/sent to wireless telephone numbers.