A recent Federal Trade Commission (“FTC”) action against, and settlement with, Publisher’s Clearing House (“PCH”) highlights the importance of offering consumers a free alternative means of entry into all sweepstakes promotions (also referred to as a “sweepstakes AMOE”). Sweepstakes operators may enable consumers to enter a sweepstakes via the purchase of a product or service. However, in such a case, a sweepstakes AMOE must also be made available, and its existence prominently disclosed to consumers.
PCH has been the subject of numerous regulatory and litigation proceedings in the past involving its sweepstakes offerings, including a consent decree entered into in 2001. In the most recent action, the FTC alleges that PCH deceived consumers into believing that they must order products before they can enter its sweepstakes games. Further, the FTC argues that PCH led consumers to believe that purchasing products increased their odds of winning. Specifically, as stated in their press release, “[t]he FTC charges that PCH used dark patterns—manipulative phrasing and website design—to convince consumers that they needed to buy a product of some kind to enter the company’s sweepstakes or increase their chances of winning.”
The FTC makes clear that providing a clear sweepstakes AMOE, and ensuring that consumers know that no purchase is necessary to enter sweepstakes promotions is required by applicable law.
How Do You Craft a Valid Sweepstakes AMOE?
As discussed above, a sweepstakes promotion can allow for contest entry through the purchase of a product or service. However, that is only permissible where a sweepstakes AMOE is provided, and where that sweepstakes AMOE is prominently and properly disclosed. Below are some key legal considerations to be aware of when informing consumers about sweepstakes AMOEs (which is by no means an exhaustive list):
- Clear and concise disclosures should be included in the sweepstakes contest rules, as well as in all applicable marketing materials, stating that no purchase is necessary to enter the sweepstakes.
- The above-referenced disclosures should include, in each instance, statements that a purchase will not increase the odds of winning.
- Sweepstakes operators should not include contradictory or confusing messaging regarding sweepstakes AMOEs.
- Entrants who utilize the sweepstakes AMOE must be given the exact same opportunity, with the exact same odds, to win each sweepstakes prize.
Sweepstakes Lawyers Can Help Ensure that You Are Compliant with Applicable Law
The criteria for ensuring that a sweepstakes AMOE is properly disclosed, and that marketing materials are otherwise compliant, can be complex and subject to frequent change. Significant legal and regulatory liability may result if a sweepstakes sponsor does not take the necessary steps to ensure that its sweepstakes AMOE is properly disclosed, where required. Where a sweepstakes sponsor plans to allow entry into a sweepstakes via the purchase of a product or service, obtaining legal guidance from experienced sweepstakes lawyers is crucial to ensuring that the sweepstakes AMOE is properly constructed, disclosed and clearly communicated.
Please note that this is only a brief overview of some of the legal issues involved in implementing a compliant AMOE. As such, remember to obtain guidance from an experienced sweepstakes attorney prior to conducting any sweepstakes promotion.
If you are interested in learning more about this topic or require assistance in connection with your sweepstakes promotions, please e-mail us at info@kleinmoynihan.com, or call us at (212) 246-0900.
The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.
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