Thursday, December 19, 2019

Sweepstakes in Australia: what you need to know before allowing Australian customers to enter your global trade promotion (or competition)

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Adapting a global sweepstake to include Australia is not as complicated as it may first appear. While   sweepstakes (referred to as draws in Australia) are regulated under the trade promotions law of each of Australia’s eight States and Territories, these laws are broadly consistent and it is not difficult to satisfy the relevant requirements.  The most relevant requirements are set out below.

Where winners are determined by a game of skill, limited requirements apply. For example, a trade promotion involving Instagram in which the winner is the entrant who uploads the most creative photo in the competition is a game of skill and is subject only to limited requirements.
In any case, all trade promotions conducted in Australia (including their marketing) must comply with the Australian Consumer Law. Further, any information obtained from Australian customers in the course of conducting the trade promotion should be collected and handled in accordance with the principles set out in the Privacy Act 1988 (Cth).  For this reason, brands seeking to conduct promotions in Australia should ensure that their advertising, terms and conditions and privacy policy are in full compliance with Australian law.
What does a sweepstake (or draw) require?
A permit
In three of Australia’s States and Territories (New South Wales, South Australia and the Australian Capital Territory), a “permit” is required to conduct and/or promote any sweepstake or draw.
  • in South Australia, a permit is required only when the value of the prizes to be awarded as part of that trade promotion exceeds AU$5,000; and
  • in the ACT, if the marketing of the promotion takes place online only (that is, there is no promotion “above the line”, for example, on television or radio) and it is not hosted from the ACT, no permit is required under ACT law.
So how do we obtain a permit and long will does it take?
Permit applications can be made online via the websites of each of the relevant regulatory bodies.
Two weeks should be allowed from the date of submission of the permit application to receive the permit.  However, the New South Wales regulator, for example, can often turn around a permit application in one or two business days.
Your advertising must include the permit number
Where a permit is required, all advertising for the trade promotion must include the permit number.  The permit number will be issued with the permit.  In other words, where a trade promotion requires a permit, the trade promotion cannot be conducted unless and until the trade promotion permit is issued.
An Australian entity must conduct the draw (and the draw may require approval!)
Where a permit is required:
  • the applicant for the permit must have an Australian business number (ABN); and
  • if a draw is to take place, the process must be approved and it must take place in Australia.
For this reason, many global brands that seek to conduct trade promotions in Australia will often engage their Australian subsidiary to apply for any permit/s that is/are required and to conduct the draw.

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