Promotional games are used in promoting sales by offering consumers an opportunity to participate in a lottery in which winning is based, at least partly, on chance. In these guidelines, draws, competitions for the public and games that are used in sales promotion are all referred to as promotional games.
Table of Contents
- Promotional games and Consumer Protection Act
- Rules must be presented clearly
- Main product must dominate the general impression
- Comprehensive obligation to provide information applies to the main product and benefit
- No false or misleading information allowed
- Promotional games are not suited for all products
- Children and young people in a special position as a target group
- Aggressive methods prohibited
- Consent to direct marketing a precondition for participation
- “Tell a friend” marketing
- Scope of the Lotteries Act
1. Promotional games and Consumer Protection Act
The scope of the Finnish Consumer Protection Act covers both promotional games in which consumers can participate free of charge and promotional games that require participants to purchase the marketed commodity or make a purchase offer on it. Ways of participating free of charge include, for example, postcards, telephone calls and SMS messages for which the advertiser may not collect any additional charges. The opportunity to participate free of charge can also be arranged on the Internet and via e-mail. In addition, traders can organise prize draws in which participation is not connected to the promotion of individual products or which are used for building a brand.
The acceptability of promotional games is evaluated under the provisions of Chapter 2 of the Consumer Protection Act and the supplementary Government Decree 601/2008 (in Finnish). The objective of the Consumer Protection Act is to prohibit influencing consumers’ decision-making in a way that is unfair and against good practice. Unfair influencing means that a consumer’s financial decisions are influenced in an improper and inappropriate manner. A manner that is against good practice, on the other hand, involves a conflict with the ethical values and principles that are commonly accepted by society.
The Lotteries Act includes provisions on lotteries in which there is a charge for participation, which require a licence and which are run in order to collect funds to promote a charitable or other non-profit activity. The Lotteries Act does not apply to promotional games in which participants are only required to buy a product or to make a purchase offer on it. If the price of the product offered is higher for those participating in the lottery than for other customers, the lottery falls within the scope of the Lotteries Act and is therefore subject to licence.
2. Rules must be presented clearly
Under Chapter 2, section 4, of the Consumer Protection Act, marketing must clearly show its commercial purpose and on whose behalf it is carried out. Under section 13 of the said Chapter, the terms and conditions of participating in prize draws, competitions for the public and games must be clear, unambiguous and easily accessible.
Marketing material must state the following aspects:
- who organises the draw or competition
- when the draw or competition begins and ends
- what criteria are used in determining the winner in a competition based on knowledge or skills
- when the draw takes place
- how winners will be informed about winning and receiving the prize.
The offer letter cannot, for example, be formulated in a way that may mislead the consumer to think it is an announcement of a draw that has already taken place and a prize that he or she has already won.
The rules must be presented in all marketing material. The rules of a lottery must be placed in the marketing material so that they are clear and readily available to the consumer. If information on a draw is provided in a way that does not enable the consumer to take part in it immediately, for example on TV or in outdoor advertisements, detailed instructions do not need to be provided in that context. However, even in such cases it should be ensured that the marketing material explains clearly where consumers can find instructions (e.g., an address to a website).
Information on the prizes must be sufficiently detailed. For example, it is prohibited to give consumers the impression that they can win prizes if all consumers are not able to take advantage of the prize. (Market Court ruling MT:2000:004)
3. Main product must dominate the general impression
When evaluating the inappropriateness of promotional games, it should be considered to what extent the lotteries and their winnings dominate marketing communications compared to the product offered. In addition, considerable prizes and a notably high probability of winning can be taken into account. These factors may influence the consumer to make a purchase decision that he or she would not have made without hopes of winning.
If a lottery clearly forms the most appealing, most central and most significant part of a marketing effort as a whole, marketing can be considered to violate the generally accepted methods of commercial activities and to significantly decrease the consumer’s ability to make an informed purchase decision. Such marketing would be considered unfair under Chapter 2, section 3, of the Consumer Protection Act.
Pursuant to case law (Market Court ruling MAO:445/09 and the Supreme Court precedents KKO:2005:81, KKO:2006:6 and KKO:2011:65), when evaluating the inappropriateness of marketing that involves additional benefits it must be taken into account that additional benefits as such are allowed in marketing. However, additional benefits may not be emphasised over the main product or dominate marketing so that comparing products becomes difficult, thereby endangering the consumer’s decision-making process.
The Market Court has in several rulings (e.g., MT:1997:29 and MT:2000:008) regarded marketing unfair in cases where it has been dominated by promotional games, presentation of prizes and requests for the consumers to participate.
In evaluating dominance, the overall presentation of the material is taken into account. This means that the amount and nature of visual and verbal presentation and the overall impression are considered. Each part of the campaign is evaluated separately. Therefore, dominance in one part is not compensated by providing more information on the actual product in another part.
4. Comprehensive obligation to provide information applies to the main product and benefit
If participation in a lottery used in the promotion of a product requires buying the product, the trader must take into account that this constitutes marketing the main product as a specific product. If the main product is not sufficiently presented and specified, there is a risk that the additional benefit is inappropriately emphasised at the cost of the main product.
Chapter 2, section 8, of the Consumer Protection Act includes provisions on the minimum level of information that must be presented when offering a specific product to the consumer. Depending on the case, a trader may be obliged to give the consumer other information as well, as provided in section 7 of the said Chapter. Because the consumer has to purchase a product to receive the benefit, marketing also has to meet the requirements on the provision of information as laid down in section 12 of the said Chapter.
5. No false or misleading information allowed
Under Chapter 2, section 6, of the Consumer Protection Act, information provided in marketing activities must not be misleading. Each part of the campaign is evaluated separately.
Marketing should show clearly, whether it concerns an additional benefit available to everyone or a benefit based on chance in a draw.
Unfounded advertisements about promotional games or prizes are never allowed (section 1, paragraph 17, of the Government Decree on practices in marketing and customer relationships considered unfair to the consumer).
6. Promotional games are not suited for all products
There are product groups whose marketing requires factuality and greater than normal reliability. These include credit as well as health and medical services and products. For example, a company’s marketing that promised a chance to win an eye operation was deemed to be against good practice (MT:2000:004).
The prizes of promotional games are also expected a certain level of appropriateness. For example, guns, explosives, dangerous chemicals and live animals should not be used as prizes.
7. Children and young people in a special position as a target group
The recognisability of marketing, the marketing of giveaways and the organisation of promotional games are subject to stricter rules when the target group is children. (MT:1995:016, MT:1996:012, MT:2000:012 and MT:2002:007)
Children under the age of 15 years usually understand marketing information and statements in a concrete manner and are not necessarily fully able to evaluate the contents of messages conveyed in marketing. Even if marketing by adult standards clearly explains the rules and chances of winning, a child is unable to make a similar evaluation. Therefore, lotteries and competitions in which consumers can participate only by buying a product cannot, in principle, be targeted to children.
Marketing directed at minors must take into account that minors are represented by their guardians. However, a minor can enter into transactions which, in view of the circumstances, are usual and of little significance. For a child under the age of 15, giving consent to direct marketing is not a transaction of little significance. Therefore, a prize draw in which permission is requested for direct marketing or which includes a statement that participants’ information is used for direct marketing cannot be marketed to minors. In addition, such marketing activities cannot be used when targeting 15-to-17-year-old young people when they involve products that minors cannot purchase independently.
Comprehensive school teachers distributed sample magazines to pupils along with an order form which they were urged to return to the teacher with their guardian’s signature. This was regarded as posing a threat that the guardian would not clearly understand the commercial nature of the procedure since other school matters are handled in a similar way. The marketing method and the related drawing for four bicycles, with children as the target group, were banned because they were considered to be in conflict with the Consumer Protection Act. (MT:1981:9)
Calling a service number subject to a charge was presented in marketing as the main way to participate in a prize draw. Although the label on the soft drink bottle mentioned the price of calling the number, children were unlikely to evaluate the price of a call on this basis. The Market Court ruled that the company had engaged in unfair marketing. (MT:1996:012)
When a promotional game is directed at minors, the prize has to be suitable for the target group. In other words, the prize cannot consist of a product prohibited from children, such as a movie or console game rated suitable only for adults.
8. Aggressive methods prohibited
Under Chapter 2, section 9, of the Consumer Protection Act, marketing must not involve harassment, coercion or other forms of undue influence that may lead to a situation in which a consumer makes a decision that he or she would not have made otherwise.
Undue influence may include, for example, offering elderly people products that they can no longer use or that are useless to them. Connecting the marketing of such products to a lottery constitutes an inappropriate practice.
In its ruling, the Market Court has prohibited a trader from asking consumers to come and claim their prizes, because the company did not clearly state that claiming the prize would entail participating in a presentation and sales event of the company’s shares. (MAO:256/08)
It is always prohibited to give a consumer the impression that he or she will win or has won something if no prize exists or claiming the prize is not free. (Section 2, subparagraph 6, of the Government Decree on practices in marketing and customer relationships considered unfair to the consumer and MT:1992:012.)
9. Consent to direct marketing a precondition for participation
Under section 26 of the Act on the Protection of Privacy in Electronic Communications, direct marketing through electronic means may not, as a rule, be directed at private persons without their prior consent. Consumers have to be able to give their consent to receiving electronic marketing messages by an active action, such as ticking a box indicating the option. Companies are not allowed to obtain permission automatically with a pre-completed choice box in connection with a promotional game. A consumer can also always cancel his or her consent.
Companies can obtain permissions to send electronic direct marketing messages also through other means than as a precondition for participation in a prize draw. Even then, the consent must be based on the consumer’s active action, such as ticking a choice box. Practices that contradict this provision are always unacceptable also under the Consumer Protection Act.
Consumers always have the right to object to direct marketing under Article 21(2) of the General Data Protection Regulation. Article 21(4) requires that consumers are informed of this right. In addition, Article 12(2) requires that the controller facilitates the exercise of data subjects’ rights.
Under the Consumer Protection Act, inappropriate practices are not allowed in customer relationships. Companies shall see to that consumers can make efficient use of their basic rights and that they are provided information on their rights. If consent to direct marketing is a precondition for participating in a prize draw, consumers must be informed about how they can refuse the direct marketing later.
The Consumer Ombudsman does not supervise personal data legislation. The competent authority in matters related to it is the Data Protection Ombudsman. More information on the topic is available in the Finnish Data Protection Ombudsman’s guide Data protection in direct marketing.
10. “Tell a friend” marketing
In the “tell a friend” method of viral marketing, consumers distribute, for example, contest invitations or other marketing messages to their friends through e-mail or SMS messages. Behind these activities is usually a trader trying to promote the demand and consumption of his products, which means that the practice is a form of marketing.
When a consumer gains some kind of a benefit for sending the message, it no longer constitutes a private exchange between two persons but a company’s marketing activity involving consumers as distributors of information. In such activities, companies must also take into account provisions on electronic direct marketing (Chapter 7, section 26, of the Act on the Protection of Privacy in Electronic Communications).
If a consumer has to send a marketing message to a friend in order to participate in a promotional game or to increase his or her chances of winning, the activity constitutes electronic direct marketing by a company, which requires an active prior consent from the recipient. Because it is practically impossible for the advertiser to request for consent beforehand, “tell a friend” methods must not be used in promotional games in the situations described above. However, it is allowed to base the marketing campaign on an exchange of views between two private persons.
11. Scope of the Lotteries Act
The Lotteries Act includes provisions on lotteries in which there is a charge for participation. Lotteries within the scope of the Act can only be run by a charitable or non-profit organisation whose registered office is in Finland. Subject to certain exceptions laid down in the Lotteries Act, a lottery may only be run with a licence. Lotteries that are prohibited under the Consumer Protection Act cannot be given a licence under the Lotteries Act.
A lottery means an activity in which participants may win a prize of monetary value based on chance, in full or in part, and in which there is a charge for participation. However, marketing that includes offering a benefit based on chance is not considered a lottery if there is no other charge for the benefit than buying a product or making a purchase offer. When participation is connected to buying a product or making a purchase offer, it constitutes a promotional game which falls within the scope of application of the Consumer Protection Act.
Collecting a charge leads to the lottery falling within the scope of the Lotteries Act as a whole, including the provisions on the right and authorization to run a lottery. The licensing and supervisory authorities are the National Police Board and police departments.
The provisions of the Lotteries Act cannot be circumvented by only seemingly connecting participation to buying a product. Efforts to circumvent the provisions include, for example, selling products of very little value with a price that is clearly too high and at the same time offering buyers an opportunity to participate in a lottery that has significant prizes. Acceptable promotional games have to be genuinely meant for promoting the sales of a certain product or service, not for raising funds by using a lottery.