Many companies use social media to promote, advertise, and market their goods and services. Some do this organically by creating an account, posting content, accumulating followers, and interacting with the site’s users spontaneously. Others offer followers valuable incentives to gin up activity and more quickly amass a following. Whatever category a company falls into, it is important that the company understand the legal implications of their social media use.
For example, a company may offer Twitter users a chance to win free samples by fulfilling some set of requirements such as following the company’s account, sharing the company’s content, tagging the company in a photo of the customer with the company’s product, and/or using a specific hashtag. These chances to win are often referred to as “social media sweepstakes.”
The Federal Trade Commission (“FTC”) enforces certain rules and guidelines on companies that run social media sweepstakes that require social media users to endorse the company’s goods or services. An endorsement occurs when a social media user expects something of value (such as free samples, cash, or other prizes) in exchange for reviewing, posting about, or otherwise marketing the company’s product or service to their followers.
In those instances, the FTC requires companies and social media users to include disclosures about their contests and in the social media posts. These disclosures must be sufficient to notify other users that the company has sponsored that content in exchange. Furthermore, the claims made in the sponsored content must be truthful and cannot be misleading.
For contests where users can win by using a specific hashtag, it is important that the hashtag meet the FTC’s guidelines. For example, a hashtag such as #CompanyIsTheBest is insufficient, because it does not properly notify other users of the platform that the poster is being incentivized by the company to make that post.
Instead, the hashtag should include some word or phrase that puts readers on notice that the poster is being incentivized by the company to make that post. This can be as simple as #CompanySummerSweepstakes or #CompanyRocksContest. While including the word “Sweepstakes” or “Contest” often meets the guidelines, the FTC has explicitly stated that using a hashtag with the word “sweeps” alone is not sufficient. The addition of the word “Sweepstakes” or “Contest” makes it clear to other users that the poster is attempting to win some prize; however, many users will not understand from the word “Sweeps” alone that a contest is taking place.
The individual users must also be sure to use the disclaimer hashtag in a clear and conspicuous way. The FTC advises users to use the hashtag at the beginning of the post, rather than the end.
While the FTC does not generally monitor social media sweepstakes, followers can and do report possible violations to the FTC. The FTC then evaluates those reports on a case by case basis before deciding whether to investigate or notify law enforcement. The FTC can enforce these rules against companies that use sweepstakes without the sufficient disclosures, so companies should become familiar with the guidelines and use proper hashtags.
Walters Law Group represents clients involved in all aspects of sweepstakes operations. Nothing in this article is intended as legal advice. If you have questions about Sweepstakes Law, please Contact Us.