Potential Legal Issues Associated With Public Voting
Companies are increasingly structuring their online promotions to encourage the submission of user-generated content (UGC) and public voting. Such interactive campaigns not only create more views for the contest, but they also increase a company’s web and social media page views, number of followers, and brand awareness.
A typical UGC-based promotion allows consumers to upload a photo or video incorporating the sponsor’s product for a chance to win a prize. The public is then invited to view the submitted content and vote for the “best” (the funniest or cutest, for example). Usually, the video that is watched the most or the photo that receives the highest number of “likes” is the winner.
The Doritos “Crash the Super Bowl” contest launched in 2006 is a perfect example of the power of social media promotions to generate brand loyalty, good will, and consumer engagement. The “Crash the Super Bowl” contest allows entrants to create and submit home-made Doritos commercials where each year the winning and second placed ads—as voted online by the general public—are aired during the Super Bowl. The success of the Doritos contest has led to an explosion in promotions involving UGC.
Despite the obvious advantages of interactive UGC contests, such promotions are not without legal risk. First, because promotions contain elements of both skill (creating the “best” video) and chance (video popularity with voting public), they may unwittingly convert a contest into a sweepstakes, and thereby effect not just the need for registration and bonding, but the promotion structure and entry requirements (including the need for an AMOE) as well.
As noted earlier, if the promotion is open to residents of Florida or New York and the total value of the prize offered exceeds $5,000, then the promotion must be registered and bonded in those states if the promotion is deemed a game of chance (sweepstakes), and not a game of skill (contest). In both Florida and New York, the failure to register and bond a sweepstakes with a prize value exceeding $5,000 exposes the sponsor to both civil and criminal penalties.6
Additionally, if public voting is used to determine an online contest winner, it could render the promotion illegal if consideration was required as a condition of entry. While most states permit the requirement of consideration for entry into a contest, it is unlawful to require consideration to enter a sweepstakes. Without exception, a promotion based on chance that requires consideration or a purchase to enter for a chance to win a prize is an illegal lottery.
Further, as members of the public may try to manipulate the voting process (for example, voting for their friends and encouraging others to do the same), some states may find that public voting injects too much chance into the contest, thereby transforming it into a sweepstakes or (worse) an illegal lottery. Companies running interactive promotions must also be prepared to stave off complaints of fraud or unfairness.
Finally, if public voting is used to determine an online contest winner, it could compromise the promotion’s legality. Indeed, in states applying the Any Chance Test, any contest which includes public voting as a judging element would most likely be construed as an illegal lottery.
The analysis is much more nuanced (read: complex) in states applying the Dominant Factor Test or Material Element Test. In assessing the degree of chance versus skill, the following factors are generally considered:
- The degree of skill required to make the submission
- Whether eligible participants are likely to have the degree of skill necessary to win
- Whether the promotion is limited or aimed at a specific skill which only a few possess
- Whether there are distinct voting criteria
- Whether the public is qualified to apply the defined criteria
- The number of rounds of voting and whether public voting is considered in each round
- Whether a qualified judge’s vote is considered (and, if so, the amount of weight it is given)
- Whether there is a limit on the number of votes a person can make
A promotion is more likely to be considered a game of chance if voting is unrestricted.
To reduce the legal risks associated with public voting, the promotion rules should limit votes to one vote per person (tracked by IP address), clearly explain the judging criteria applicable for public judging, and require that the selection with the highest public vote count as only a percentage of the overall criteria by which a winner is ultimately selected, with professional judges having the final say.