We’ve all seen the COVID-19 fall-out in the past few weeks—indeed, we’ve all lived the fall-out.  But the promotions, events, and hospitality industry has been particularly hard-hit by the recent restrictions on public gatherings and travel. From Coachella to SXSW to the Olympics, events around the globe have been cancelled, rescheduled, or postponed —sometimes indefinitely—due to the pandemic.  These postponements and cancellations have put companies sponsoring promotions such as sweepstakes and contests, events, and ad campaigns linked to these postponed events in a difficult position.  How do companies protect themselves from potential liability associated with the postponement or cancellation of a sponsored event?  Can one change the terms and conditions of sweepstakes associated with an event to when the event is postponed or cancelled?  Those of us familiar with contract law understand how important a well-drafted Force Majeure clause can be in this situation.  But one doesn’t always have a well-drafted Force Majeure clause when dealing with a new pandemic.  And, as is often the case, sweepstakes and prize promotions rules (and related documents) are a form of contract, but they are a type of agreement that is regulated a bit differently from a standard commercial contract between sophisticated business entities that have negotiated in good faith.  Let’s unpack that.

Continue Reading Coronavirus Cancellations: How Do They Affect My Promotion?

In February 2018, the FTC teamed up with the Missouri Attorney General’s office in filing a complaint against a prize promotions company and others that allegedly operated a large-scale deceptive prize scam targeting the elderly. A little more than a year later, the FTC and the Missouri AG’s office announced that they reached a settlement

Enter to Win!There are certain words and phrases that set the antennae of promotions lawyers – and law enforcers – buzzing. “Everybody wins” comes to mind right away – but there is one little word that can pay out tremendous legal problems and should concern anyone involved in executing sweepstakes and promotions. That word is “raffle.”

While many people use “raffle” interchangeably with “sweepstakes” or “drawing” to designate a legal game of chance that any entity can run, most raffles are illegal under federal and state gambling laws. Narrow exceptions exist for certain activities involving nonprofit organizations, such as charities, but those carve-outs and their accompanying requirements vary from state to state.

The chief problem with raffles is that they, by their nature, contain all three elements of an illegal lottery: (1) the award of a prize; (2) that is determined by chance; and (3) participants must submit consideration to enter.

Continue Reading These Six Letters Can Spell “Trouble” for Sweeps and Promotions

medal winnerAnd the big “winner” is (drumroll) … the Italian Competition Authority. A multinational electronics company was a most recent victim of the stringent Italian prize promotion regulations — to the tune of € 3.1 million (or roughly US$3.37 million). The costly sanctions were imposed on the company by Italian authorities for, among other issues, unfair commercial practices. The authorities challenged the execution of some of the company’s promotions, claiming that the advertising for the promotions did not include clear and sufficiently visible explanations of how to win the prize, in violation of Italian customary commercial practices, and that the sponsor’s requirement that the winner must register and provide personal information in order to win the prize was in violation of Italian law as well. And the issues highlighted above are just some of the parameters a marketer needs to consider when running a successful sweepstakes in Italy, from a notary requirement to the need for a VAT (“value-added tax”) representative for non-Italian sponsors to the need for compliance with Italian privacy laws. The combination of these issues provided the perfect backdrop for an enforcer to make an example out of the multinational company’s marketing efforts, and gives us the perfect opportunity to remind companies to be diligent when running international promotions while we alert our base to these complex foreign issues.
Continue Reading It’s Not a Small World, After All, for Sweepstakes: Lessons Learned from International Sweepstakes

beerPerhaps some readers once (or still do!) enjoyed some Natty Light while listening to the Beastie Boys. Some time ago, we blogged about the ongoing Beastie Boys litigation against Monster Energy over copyright and right of publicity issues for a video Monster Energy posted on its website. The next case to watch is Kraft v. Anheuser-Busch, LLC where individual Kayla Kraft sued Anheuser-Busch for copyright infringement, invasion of privacy, and violation of her right of publicity for using her image in an advertising campaign. This quite delightful photo shows Ms. Kraft drinking a beer and wearing a fake mustache and was allegedly used by Anheuser-Busch on posters and coasters in its “Every Natty Has a Story” Natural Light campaign. According to Kraft’s complaint, a friend took the picture of Ms. Kraft with Kraft’s phone in February 2013. Ms. Kraft then posted the photo to Facebook. Her friend later assigned her copyright in the photo to Ms. Kraft who registered the photo with the U.S. Copyright Office, and Kraft sued on February 20, 2016. Anheuser-Busch’s Answer is due by April 7, 2017.
Continue Reading A Timely Reminder to Re-Examine Your IP Clearance Protocol: Anheuser-Busch Sued by Individual for Use of a Photo She Posted to Social Media

water glassIt has been almost a decade since a water-drinking contest held by an Entercom’s Sacramento radio station resulted in the death of a contestant, but the Federal Communications Commission (FCC) has a long memory.  Last week, the FCC issued a Hearing Designation Order (it can be found here) to determine whether the license held by Entercom – one of the largest station owners in the country – should not be renewed based on new information about the “Hold Your Wee for a Wii” contest.

The 2007 contest challenged participants to compete for a prize by drinking water at regular intervals. To win, a contestant would have to be “the last one standing” (or holding it) – the competitor could not use the bathroom until the competition was over.  The radio station at no point, either before or during the contest, announced the risks associated with the contest in general or water intoxication.  Ultimately, the contest led to the fatal water intoxication of contestant Jennifer L. Strange.  Civil claims for wrongful death were filed against the radio station, which was ultimately found to have been negligent.

Continue Reading Water Drinking Contest Causes Waves at the FCC, Potentially Sinking the Promoter

Among other things (National Pizza Month, anyone?), October was Breast Cancer Awareness Month and the Washington Post recently published an interesting article about the connection between retail apparel marketing and breast cancer awareness efforts. The combination of the two – “pink marketing” – is as ubiquitous during the month of October as Halloween candy and pumpkin-spiced lattes.

White House Goes PinkOver time, cancer charities have sought to increase donor awareness of their mission and boost fundraising by partnering with for-profit corporations. This cause-related marketing can be mutually beneficial: the charity is helped by the company’s marketing budget and public relations heft, while the company enhances its goodwill with customers (indeed, some research supports the notion of a “halo effect” for retailers that consumers believe are socially conscious). Thus, we see successful partnerships like the one featured in the Washington Post article between the National Football League and the American Cancer Society, or relationships between World Wrestling Entertainment and Susan G. Komen. In October, hulking athletes incorporate pink into their uniforms and leap from pink wrestling ropes. Celebrities wear pink ribbons and retailers offer pink-colored versions of their products. Even the White House goes pink.

Continue Reading Don’t Let “Pink” Marketing Lead to Others Seeing Red

winner-1445797_640The next issue in our series of blog posts about the Olympics considers “Rule 40,” which can get both advertisers and athletes into trouble. We think Rule 40 deserves a gold medal for generating buzz in the advertising world, and a silver for generating confusion.

Rule 40 restricts participants in the Olympic Games (i.e., competitors, coaches, trainers, and officials) from allowing their “person, name, picture or sports performances to be used for advertising during the Olympic Games.” The advertising blackout period for the Rio 2016 Olympics is from July 27th through August 28th, which is from 9 days prior to the Opening Ceremony until  3 days after the Closing Ceremony. 
Continue Reading Golden Rules: Diving Into Rule 40

Design Lab Asymmetrical DressBaseball season is just around the corner, and the FTC’s native advertising case against retailer Lord & Taylor illustrates the baseball rule of “Three strikes and you’re out!”  In its first native advertising case since releasing its Enforcement Policy Statement Addressing Native Advertising and Deceptively Formatted Advertising, the FTC reminds advertisers that those guidelines will be enforced.

According to the complaint, Lord & Taylor launched a new Design Lab collection in the fall of 2014.  As part of its marketing campaign, Lord & Taylor included a comprehensive social media campaign (“product bomb”) for the end of March 2015.  The campaign consisted of Lord & Taylor-branded social media posts and the use of a team of “influencers,” all focused on one article of clothing—the Design Lab Asymmetrical Dress.

Continue Reading Three Strikes and You’re Out!: The FTC’s Native Advertising Case Against Lord & Taylor

The Federal Trade Commission (“FTC”) has just released its Annual Summary of Consumer Complaints, and debt collection (29%), identity theft (16%), and imposter scams (11%) top the list of the most common categories of consumer complaints.

The Consumer Sentinel Network Data Book is produced every year from complaints received by the FTC’s Consumer Sentinel Network, including consumer complaints and complaints forwarded from state and federal law enforcement agencies, national consumer protection organizations, and non-governmental organizations. While the data book consists of unverified complaints, it is a useful tool for tracking developments and issues important to consumers.

The FTC’s summary overall shows little change from last year.  There were a few categories that changed places; for example debt collection complaints traded places with identity theft to claim the top spot, but the FTC also noted that the spike in debt collection complaints was due in large part to one data contributor employing a new mobile app to collect such complaints.  Internet Services, which had been number 10 fell out of the top ten to be replaced by Credit Bureaus, information furnishers and report users.
Continue Reading Debt Collection Tops 2015 List of Most Common Consumer Complaints