From Windfalls to Catastrophes: Canadian Contest Law

FROM WINDFALLS TO
CATASTROPHES:
Canadian Contest Law and Practice
by Bill Hearn, McMillan Binch Mendelsohn
The Canadian Institute’s Advertising and Marketing Law Conference,
Toronto, Ontario
January 25, 2007
AGENDA
• Canadian Contest Law
Criminal Code
ƒ Competition Act
ƒ Quebec
• Canadian Contest Practice
ƒ Catastrophes and Mix-ups
ƒ Winners
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AGENDA
(cont’d)
• Questions
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Managing risks with rules, declarations
and releases
On-line contests
Privacy challenges
Contests for Kids
3
TOOLBOX OF MATERIALS
• Contest Law Primer
• Appendices
4
THE STARTING POINT
Primary objectives are usually to sell products
and services, drive traffic to websites and
develop consumer databases
• Creative is King!
• But don’t give short shrift to legal compliance
•
5
THE STAKES ARE HIGH!
•
Canada: Budweiser Super Bowl
Tailgate Plane Contest
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Canada: Rogers Video – Win a
Film Fantasy
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•
Win two seats aboard the Budweiser
Tailgate Private Jet and seats to Super
Bowl XLI.
“whisked off to a secret training base”
where “contract mercenaries and Green
Berets teach you all the skills you’ll need
to survive a 3-day paramilitary covert
mission in hostile territory.”
United States: Pepsi – “Play for
a Billion Dollars” Sweepstakes
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CONTESTS AND
THE CRIMINAL CODE
The Skill-Testing Question
•
•
•
Paragraphs 206(1)(a) to (d) of
the Criminal Code prohibit
schemes for disposing of
property by “any mode of
chance”
Supreme Court of Canada has
clarified that only games of
“pure chance” are prohibited
A proper skill-testing question
converts a game of pure
chance into a game of mixed
chance and skill
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THE SKILL CHANCE CONTINUUM:
Games of Skill vs. Games of Chance
THE SKILL CHANCE CONTINUUM:
Games of Skill vs. Games of Chance
THE SKILL CHANCE CONTINUUM
Games of
Pure Skill
Bridge
(1968)
Guess # of
beans in a jar
(1884)
Throwing
dimes in
dishes/cups
(1979)
Answer
math
STQ
(1984)
Darts
(1980)
Deposit $
Different
cigars
(1903)
Bottle
KnockOver
(1974)
Est. # of
votes in
election
(1904)
Estimate Time
Barrel travels
(1949)
Book with
Lottery ticket
and STQ (1995)
Temperature
Estimate
(1932)
Mechanical
Vending
Machine
(1931)
Draw and
obvious
STQ
(1958)
Limited Time
Trivia Game
(1989)
Potato Peeling
Contest
(1954)
Est. # of
railway
Passengers
(1928)
Crane
Game
(2002)
Questions
where
answers
given
(1968)
Skill Puzzle
Board
(1938)
Turkey
Shoot
(1902)
Video
Lottery
(1998)
Games of
Pure Chance
CONTESTS AND
THE CRIMINAL CODE
ƒ
“No Purchase Necessary”
Section 206(1)(f) of the Criminal Code makes
it an offence to:
dispose of any goods, wares or
merchandise by any game of chance or
any game of mixed chance and skill in
which the contestant or competitor pays
money or other valuable consideration
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CONTESTS AND
THE CRIMINAL CODE
• Penalty
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Indictable offence punishable by
imprisonment for a term not
exceeding two years
OR
Summary conviction offence
punishable by a fine not exceeding
$25,000
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CONTESTS AND
THE COMPETITION ACT
• Full Contest Rules:
Adequate and Fair Disclosure
ƒ Number and approximate value of prize;
ƒ Area or areas to which they relate; and
ƒ Any fact within the knowledge of the
contest sponsor that materially affects
chances of winning.
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CONTESTS AND
THE COMPETITION ACT
• Short List Disclosure in Ads:
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Packaging
Point-of-Sale
Billboards
TV
Radio
Internet
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Packaging Short-Form Disclosure
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Radio Short-Form Disclosure
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Tim Hortons
“Roll Up the Rim to Win”
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CONTESTS AND
THE COMPETITION ACT
• Competition Bureau’s Program of Binding
Written Opinions
ƒ $1,000 fee
ƒ 2 weeks for “simple” contests
ƒ 6 weeks for “complex” contests
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CONTESTS AND
THE COMPETITION ACT
•
•
Current Penalties
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Individuals:
- Up to $50,000 for the first infraction
- Up to $100,000 for subsequent
infractions
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Corporations:
- Up to $100,000 for the first
infraction
- Up to $200,000 for subsequent
infractions
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Publication order/notice
Proposed Penalties
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Individuals – up to $750,000
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Corporations – up to $10 million
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Restitution for consumer loss
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CONTESTS AND QUEBEC
•
Additional Requirements
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All materials for Quebec residents must be in
French
Notice of the contest, together with the applicable
duties, a copy of the contest rules, and the text of
any advertisement used in the contest must be
filed in advance with the Régie
Duties based on the value of prizes available to
Quebec residents must be paid in advance
The contest rules must contain certain prescribed
information
In certain cases, a security bond with the Régie
may be required
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CONTEST CATASTROPHES AND
MIX-UPS
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Hold your wee for a Wii(2007)
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Chubby Bunny Contest (2006)
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SELECTED CONTEST MIX-UPS
• Ultramar (Canada) 2001
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SELECTED CONTEST MIX-UPS
•
McDonalds (US and Canada), 2001
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Contest Caveats
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Creative Contests that Play by the
Rules
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LCBO Buy to Fly
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Esso Contest
At Roadside
At Pump
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Esso Contest
At Counter
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Bell Beavers
Red Hot Chili Peppers Contest
TopModel_30En.mov
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VISA“Win What You Buy”
Contest open to Canadian resident over
the age of majority. No purchase
necessary. Some conditions apply.
Contest runs from January 1 to
December 31, 2006. 365 prizes in total.
Skill-testing question required.
Purchase winners receive a credit for
qualifying Visa purchases, less returns,
posted during the applicable Contest
Month, up to $100,000. Non-purchase
entry winners will receive a cheque
equal to the largest amount of total
Qualifying Purchase transactions made
by a purchase winner during the
applicable Contest Month. Odds of
winning depend on the number of
entries received each Contest Month.
Call 1-866-755-8886 or visit
www.visawinwhatyoubuy.ca for full
contest details.
™/* Trademarks of Visa International
Service Association; Visa Canada is a
licensed use
© 2006 McDonald's.
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Wendy’s Kick-a-Field Goal for $1 Million
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WRAP-UP
• Avoid common hazards
• Address regulatory concerns
• Address contractual concerns
• Skipping legal advice may be false
economy
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Questions?
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