The FCC’s ‘Contest Rule’ and how it may affect your sweepstakes

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The Federal Communications Commission‘s (“FCC”) “Contest Rule” (found in the Communication Act of 1934 (47 U.S.C. § 509)) applies to television and radio broadcasters and their sponsors. The Contest Rule provides that it is illegal to “predetermine or prearrange” the outcome of a contest or to broadcast a “predetermined or prearranged” contest. This means that any time that a sweepstakes or contest is announced or advertised via television or radio, the television or radio broadcaster must comply with the Contest Rule. Since the FCC generally does not regulate radio or television that is not broadcast over the airwaves, this rule does not apply to satellite radio, the internet or cable.

To help prevent broadcast of “predetermined” contests, the FCC requires broadcasters and their stations to accurately disclose the important rules and policies of sweepstakes and contests via broadcast to comply with the Contest Rule. Examples of important rules and policies that must be broadcast include, among other things:

  • The method of entry or participation in the contest
  • Eligibility restrictions
  • Entry deadlines
  • Prize availability
  • Nature of the prize, including valuation
  • Winner selection procedures
  • Tie-breaking procedures

The FCC allows broadcasters to comply with the Contest Rule by making the sweepstakes or contest rules available on the broadcaster’s website, the station’s website or an Internet site that is free and accessible to the general public. Publishing the rules on the Internet is not a complete substitute for the broadcast requirement under the Contest Rule; the broadcaster must also broadcast the web address where the contest or sweepstakes rules and policies may be found and must also maintain the contest or sweepstakes terms online for at least 30 days after the contest ends. Additionally, if the sweepstakes or contest rules change after they are initially announced, then the broadcaster must, within 24 hours of the change, announce on air that the rules of the sweepstakes or contest changed and must direct the audience to the website to review the changes.

Finally, and most importantly, the disclosure of the rules and policies, no matter how it is made, must not be false, misleading or deceptive. The FCC is especially concerned with ensuring that contests are conducted substantially as advertised, so it is imperative to review the important rules and policies and verify that they accurately describe the contest being advertised.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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