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Online Competition Laws and Boosting your Social Media Presence

When operating your business or promoting your brand online, there are many tips and tricks you can use to boost your following, interaction and traffic. Effective use of these techniques can be the driving force behind growing your customer base and taking your business social media profile to the next level!

One technique proven to be very successful and used by many popular brands is the running of an online competition on social media – you engage your audience by attracting prospective entrants with the chance of winning ‘freebies’. This only works if the prize you’re offering is particularly enticing for your target market.

You will need to engage with your audience to attract potential customers through your competition. You can channel online competitions through a link which entrants can enter from, or perhaps use a hashtag or image of your competition. Really, there are many ways to get creative in promoting your business through an online competition!

Often, on a social media website, you can ‘like’ or tag your friends into the post, to give the competition traction to gain an audience and be featured on popular pages. So, you can see why running a competition can be very effective as there is a wide reach to all your contacts and the word-of-mouth that flows from that. However, there are some things you need to consider before posting your comp!

You will need to have clear terms and conditions in compliance with the Australian Consumer Law, which can be created with the help of a lawyer. Firstly, you will need to decide who will be able to enter your competition. For example, does your winner need to be over 18? Is this a national, or international competition? These details need to be set out clearly in your terms and conditions, and that the entrant meets your requirements for entering the competition.

Running an online competition in Australia requires the correct permits and these differ from state to state. Generally, the cost of the permit and requirements will be determined by the value of the prize being offered through your online competition. Some states require permits for games of chance and some don’t require permits where the competition winner is selected on the basis of skill or the prize value is less than $5,000.

A game of skill is any competition that does not use a random draw for the winner, rather, the winner is based on merit. Some states don’t require a permit at all irrespective of the prize value or where entry is free to enter the competition. You cannot charge entrants to enter into the competition otherwise the promotion will be classified as a lottery and different laws and permits apply. Social media channels also have their own rules for competitions.

You will need a time frame for when submissions close and the winner will be announced. And, of course, you will need to work out what are the criteria to win the competition. You should include in your terms a right to disqualify entrants, for example, family members, or close friends. You will also need to cover any liability that may arise from the competition.

There is the risk of being sued if you do not accurately describe your prize or if you infringe intellectual property rights. You will need a privacy policy because you will be obtaining the personal information of entrants. You should also consider how your winner will be notified, and how they will receive the prize!

Importantly, you need to address  intellectual property rights, in particular, copyright, if creators are asked to submit works online. You will need to obtain a licence to display or use the work, including for promotional purposes otherwise you will be in breach of intellectual property law rights. The same applies to the use of any trade marks.

If you have previously thought running an online competition is a quick and easy way to boost your numbers, there is a lot more that goes into it! A lawyer can help draft your terms and conditions. This will ensure everything is done by the book before you can get creative with your competition to open new markets and customers.

Key Take Away Points

Be aware of the laws and your specific legal obligations

Familiarise yourself with each social network’s rules for competitions and promotions

Whether you need a competition permit (trade promotion permit)

You have clear terms and conditions that comply with the Australian Consumer Law

That you have an intellectual property clause in your terms and conditions

A privacy policy if you are collecting personal information in accordance with the Privacy Act 1988 (Cth)

Lara Alexandra, Legal Assistant and Trade Mark Administrator

We are a team of trade mark attorney and IP specialists based on Gold Coast and Sydney. If you have any questions about trade mark and brand protection, contact us on 1300 77 66 14


Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.

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