Businesses often run competitions (also known as trade promotions) to increase consumer engagement with their brand, product or service or to boost brand and product visibility. A Trade Promotion is a free-entry competition held by a business to promote its goods or services.
A business can run a trade promotion as either:
(1) a game of chance where all entrants have an equal chance of winning; or
(2) a game of skill where the winner is chosen against set criteria.
All trade promotions, whether a game of chance or a game of skill, must comply with all consumer protection and privacy laws, such as the Australian Consumer Law and Privacy Act. This may include for example ensuring that any activities or conduct relating to the competition or trade promotion is not, or is not likely to be, misleading or deceptive and that no misrepresentations are made in relation to the competition or trade promotion.
If the trade promotion or competition is a game-of-chance, you will also need to comply with the applicable trade promotions laws. Trade promotions laws are state-based laws that set the rules for how trade promotions can be run in the relevant state. These laws vary from state to state and usually require businesses to apply for a permit to run a game of chance, sets criteria for Terms and Conditions, and sets out rules for drawing a winner.
As trade promotions laws are State-based, businesses must take extra care to ensure compliance with the various rules of each State when running an online competition.