Cybersweepstakes

Susan Vogt practises marketing law at the Toronto offices of Gowling, Strathy & Henderson....

Susan Vogt practises marketing law at the Toronto offices of Gowling, Strathy & Henderson.

Gambling addicts have a new place to go where the odds are good and the chairs are easy. There’s a lot of action on the Internet these days – everything from high-stakes betting sites to run-of-the-mill consumer promotions.

I won’t deal with the former because they’re (a) illegal, (b) about-to-be illegal or (c) highly regulated – and the "house", so to speak, is probably in the Caymans. What interests me more is the online profusion of sweepstakes, where the winners are determined by chance, and "skill" competitions, where essays, photos, and so on, are judged on the basis of effort and skill.

It seems that the majority of Web sites these days feature contests as a running attraction or occasional feature. Small wonder when you consider how contests can draw consumers to your site and keep them coming back. In addition, many promotions conducted in the bricks-and-mortar world now have an online component.

So the question arises: Are there different legal rules for online contests? Yes and no. There are certainly distinct requirements when it comes to online contest rules.

First of all, make sure that you limit your universe. Unless you intend to comply with worldwide contest laws, the first and most prominent rule should be: "Contest restricted to residents of Canada." It is tempting and certainly feasible to open your contest to the millions of potential participants in the United States. But if this is your plan, your contest rules should be reviewed by a U.S. lawyer and registered in the several states (such as Florida and New York) that have Quebec-style registration requirements. This will take time and money – an additional $10,000, at least.

The second and equally important rule is to limit your exposure if the system crashes, or a bug, virus or other beast interferes with the conduct of your contest. A properly drafted Internet clause will add at least 100 words to your rules. This is space well used. Nobody knows just how badly an Internet contest can implode. Protect yourself by disclaiming responsibility for hackers, acts of God and other calamities. The disclaimer should cover system malfunctions that interfere with the contest as well as liability for any damage caused to a user’s system by participating in the contest.

Third, you need to be specific about the deadline for entry. Traditional contests specify a date. Online contests should specify the date, the time and the time zone – for example, 11:59 p.m. (EST), May 31, 2000.

Fourth, you need to restrict the number of entries per person or e-mail address, and make sure that your software accommodates this restriction. Internet addicts, left to their own devices, could flood your system with multiple entries. In addition, the rules should include a clause that states that e-mail entries will be deemed to be submitted by the holder of the e-mail account. That way, any disputes about who submitted an online entry can be easily resolved.

Fifth is the tricky question of a "purchase requirement" – prohibited, in most cases, in both the United States and Canada. Is Internet participation a per se purchase requirement because participants must pay for Internet access? We don’t have a definitive answer to that one yet.

Equally problematic: Are the long questionnaires that accompany many online contests a "purchase" requirement? Legally, you cannot require contestants to (a) spend money or (b) expend unreasonable efforts to enter your contest. So questionnaires that are tied to contest entry should be short and relatively simple.

There is no Canadian ruling as to whether you need an alternate "no purchase" means of entry for online contests. I’d have to say probably not. American regulators, who are generally stricter in this regard than their Canadian counterparts, have decided that Internet-only contests are legal. Nonetheless, if you make participation difficult or time consuming, there is a danger that this will be considered a de facto purchase requirement.

Finally, if your contest is complicated or involves unusual requirements, consider including a "Submit" button by which participants confirm that they have read and agree to be bound by the contest rules before they enter the contest.

And nota bene: All of these rules are in addition to the usual contest requirements. The Criminal Code, the Competition Act and Quebec’s lottery legislation apply in cyberspace. So you still need a skill-testing question, the Régie clause and all the other conditions, qualifications and legal disclaimers that are found in normal contest rules.

Susan Vogt can be reached by phone at (416) 862-5439 or by e-mail at vogte@gowlings.com

In Brief: The Garden picks CDs to take on daily creative leadership

Plus, Naked names two new leaders of its own and Digital Ethos comes to Canada.
TheGarden_FL

The Garden promotes two creative directors

ACDs Lindsay Eady and Francheska Galloway-Davis have taken over responsibility for day-to-day creative leadership at The Garden after being promoted to creative director roles.

The pair will also help develop the agency’s creative talent, formalizing mentorship and leadership activities they have been doing since joining the agency four and three years ago, respectively. In addition to creating the agency’s internship program, the pair have worked on campaigns for Coinsquare, FitTrack and “The Coke Challenge” campaign for DanceSafe.

Eady and Galloway-Davis will continue to report to The Garden’s co-founder and chief creative officer Shane Ogilvie, who is stepping back from daily creative duties to a more high-level strategic role, allowing him to focus on client relationships and business growth.

Naked Creative Consultancy names new creative and strategy leadership

Toronto’s Naked Creative Consultancy has hired Yasmin Sahni as its new creative director. She is taking over creative leadership from David Kenyon, who has been in the role for 10 years and is moving into a new role as director of strategy, leading the discipline at the agency.

Sahni is coming off of three years as VP and ECD at GTB’s Toronto office, where she managed all the retail, social and service creative for Ford Canada. She previously managed both Vice Media and Vice’s in-house ad agency Virtue.

Peter Shier, president of Naked, says Sahni’s hiring adds to its creative bench and capabilities, as well as a track record of mentorship, a priority for the company. Meanwhile, Kenyon’s move to the strategy side, he says, makes sense because of his deep knowledge of its clients, which have included Ancestry and The Globe and Mail.

Digital Ethos opens a Toronto office

U.K. digital agency Digital Ethos is pursuing new growth opportunities in North America by opening a new office in Toronto.

Though it didn’t disclose them, the agency has begun serving a number of North American clients, and CEO/founder Luke Tobin says the “time was right to invest in a more formal and actual presence in the area.” whose services include design, SEO, pay-per-click, social media, influencer and PR,

This year, the agency’s growth has also allowed it to open an office in Hamburg, Germany, though it also has remote staff working in countries around the world.

Moray Hickes was the company’s first North American hire as VP of sales, tasked with business development in the region.