Dot Your I’s and Cross Your T’s: Running a Successful Global Promotion
“Running an international promotion can’t be that difficult, right? Won’t the same rules work everywhere?”
The rules for sweepstakes, contests, and other promotions vary dramatically by country, and sometimes by province or local jurisdiction. A promotion that is perfectly legal in the United States is not necessarily permitted in any other country – even a nation like Canada can have significantly different rules of the road, including registration requirements in Quebec. In short: assume nothing!
While it is crucial to consult with local counsel in each country to clear international promotions of any kind (and we rely on our network of foreign associates to confirm compliance with current local laws), we thought it would be useful to list a few of the interesting rules and regulations we have encountered in recent years while coordinating global promotions for our clients:
- The promotion’s official rules and advertisements must appear in the local language. (Argentina, Canada, Norway, Russia, and many others)
- Some countries make promotion winners responsible for taxes related to the prize (Malaysia), while other countries place the tax responsibility on the sponsor (e.g., Spain and Mexico).
- Governmental authorities must pre-approve promotions. (Brazil)
- Contestants must provide express written consent to the use of their images, and the Official Rules must specify where the image will be used. (Dominican Republic)
- Only skill-based contests are permissible. (Israel, Sweden)
- The rules must be filed with governmental authorities before the promotion commences, the sponsor must seek a bond, and local authorities must supervise the selection of winners. (Italy)
- Local law specifies the maximum prize value for chance-based games. (Netherlands)
- Proof of purchase promotions for chance-based games may be OK, but the sponsor cannot charge the entrant a fee to enter the promotion. (Australia)
This represents just a peek into some of the twists and turns you might encounter when structuring a global promotion – and the rules are changing all the time. As US lawyers, we cannot, and do not, offer legal advice in connection with the laws of other nations, which is why it is so important to have a network of lawyers around the world who can help a promotion comply across borders and cultures and legal systems. And remember: allow yourself plenty of lead time to confirm local requirements before you announce the promotion!