If you are planning on running a trade promotion on your Facebook Page in Australia, you need to ensure your competition is run in accordance with both Facebook Page Guidelines for Promotions and State Government regulations for trade promotions.
Failure to comply with these legal requirement could result in your business being fined or your Page being removed by Facebook. All it takes is for a competitor or disgruntled customer or ex-employee to report you. Are you willing to run the risk?Please note this post was originally dated August 28, 2013. On 2 January 2016 I updated it to fix some broken links and cite the latest page guidelines.
So how do you run a legal Facebook competition?
There are basically two type of competitions with their own unique set of State Government regulations.
- “Game of Chance” (lottery/sweepstakes) where the winner is drawn at random or wins by element of chance; or
- “Game of Skill” (contest) where the winner is judged or voted and selected for their skill (eg. the best photo or answer to a “Tell us in 25 words or less” question).
The most popular promotion run on Facebook is a “Like to Win” competition which is “Game of Chance”. Others run “Game of Skill” competitions where the best photo, video or answer is judged and awarded by the Page reps or is voted the most popular.
Each contest must be run in accordance with the guidelines and regulations below.
Follow the Facebook Competition RulesAs of 27 August 2013, Facebook has relaxed its Page Guidelines for Promotions.
You can now run Facebook promotions (eg. contests or Like to Win sweepstakes) on your Page wall and are no longer required to use a third party app.
Pages can now:
- collect entries via users (fans and non-fans) posting on the Page wall
- collect entries by users commenting on or liking a Page post
- collect entries by having users message the Page
- collect votes via likes (new fans, post likes)
View the revised Facebook Page Guidelines for Promotions and read the official announcement here https://www.facebook.com/
No “Share to Win” or “Like and Share to Win” or “Tag a Friend to Win”
According to the new Facebook Terms: “Personal Timelines and friend connections must not be used to administer promotions (ex: “share on your Timeline to enter” or “share on your friend’s Timeline to get additional entries”, and “tag your friends in this post to enter” are not permitted).”
If you want to promote your competition wider than your current fans, then ask them to Share the competition post, but don’t tell them they have to in order to enter. Or use a third party app which has built-in viral sharing posts for each entry.
Follow State Government Competition Rules for Trade Promotions
You also need to follow the competition rules for each State or jurisdiction in which you are running the promotion (not just the State in which your business is registered or operating). If the competition is open to anyone in Australia, then each State has it’s own rules regarding trade promotions covering disclosure, notification and awarding of prizes.
Some jurisdictions require you to apply for a permit when running a trade promotion lottery (Game of Chance). They also require you to publish the winners names in a newspaper. It’s to ensure winners are selected fairly and the contest is not rigged.
A licence or permit is not required in Queensland, Victoria, Western Australia and Tasmania. In South Australia and Northern Territory a permit is required if total prize value is greater than $5,000. In the ACT a permit is required for prizes greater than $3,000. And in NSW, you need to purchase a permit for any trade promotion lottery run.
In my experience, it’s simplest to run a Game of Skill or contest as you don’t require permits.
Australian State Government Guidelines for Trade Promotions
Include a link to full Competition Terms and Conditions
All states require you to publish a set of terms and conditions that are readily available from the competition notice or entry form. If you only want to target entrants in your local area or state to avoid the red tape from each state, then put that as one of your Eligibility conditions in your competition terms and conditions (eg. only people currently residing in these postcodes or this state are eligible to enter).
Facebook requires a complete release of liability by each entrant. Sample wording is below:
By entering and participating, entrant agrees to hold harmless, defend and indemnify Facebook from and against any and all claims, demands, liability, damages or causes of action (however named or described), losses, costs or expenses, with respect to or arising out of or related to (i) entrant’s participation in the Sweepstake, or (ii) entrant’s participation in any Prize related activities, acceptance of a Prize and/or use or misuse of a Prize (including, without limitation, any property loss, damage, personal injury or death caused to any person(s).
Also include the following wording:
This promotion is in no way sponsored, endorsed or administered by, or associated with Facebook.
Consider using a Third Party App for your Facebook Competition
From 27 August 2013 you are no longer required to run your promotions through a third party app. You can now run your promos directly on your Timeline.
Third Party apps have a number of benefits over using your Page Timeline:
- Using the app templates, you can create slick branded competition landing pages and entry forms to create a strong first impression to new fans. You simply upload banners, logos and set your brand colour scheme and fonts.
- You can have a custom URL for your Facebook promo page that you can link to from your website or in offline promotions (posters, press ads, postcards).
- You can have a custom Tab for your competition so that it is always top of Page and easy to find.
- Apps collect and store all the entries (Likers, email addresses etc) in a database and then run an algorithm to randomly select a winner for Like to Win sweepstakes – saving you having to keep track and do this manually.
- You can collect email address through a mailing list opt-in on your entry form. These can be downloaded to into a spreadsheet or even sent straight to your list in Mail Chimp, Mad Mimi, Constant Contact or other email service provider.
- Having collected their email address, you can easily contact the winner to notify them.
- Some apps have viral sharing mechanisms where entrants can choose to let the app post that they have entered the competition in their news feed. The viral post can contain your custom branded image and text. See below
Facebook Third Party Competition Apps
Below are a few third party Facebook competition app platforms that essentially host your competition on Facebook.com for a small fee. They are simple to use and you don’t need to know any technical app development stuff to get up and running.
In summary, to run a legal Facebook competition you need to:
- Check State Government gaming and trade promotions guidelines for each state where the competition is open (from where people are eligible to enter).
- Apply for competition permits if relevant. It depends on the entry mechanism and the value of your prize.
- Draft terms and conditions that comply with each State’s regulations and ensure they are accessible from your Facebook competition page or post.
- Run your Facebook competition according to the Facebook Page Guidelines.
So that’s the legals covered. The steps to running an effective or successful Facebook competition is a separate topic that I will cover in a future post.
NB: Only businesses with an ABN (Australian Business Number) are eligible for permits and therefore subject to the Australian statutory laws/regulations. International businesses targeting Australia do not need to comply with these guidelines.