The power of user-generated content (“UGC”) as a promotional tool is ubiquitous and well understood; however, global marketers face challenges when trying to approach a campaign from an international perspective. A recent development concerning UGC contests in Italy has caught the attention of global marketers.
A UGC contest usually involves a promotional prize event where entrants submit original content that is evaluated, curated, and judged, and prizes are then awarded. UGC promotions engage consumers and can thus generate buzz and create excitement around a brand. Despite the benefits of these UGC promotions, some marketers have been wary to run these promotions in certain international jurisdictions because of the legal burdens associated with entering the foreign markets. In Italy, for example, contests with a prize award are regulated by the Ministry for Economic Development and are subject to various legal and administrative requirements set forth in Presidential Decree no. 430 of 2001.
Recently, however, Italian regulators have indicated that certain UGC promotions may be exempt from legal requirements. In a recent memorandum, Italian regulators have stated that UGC promotions would be exempt from the Decree if (i) no purchase was required for participating in the promotion and (ii) the incentives were intended to promote society’s collective interests. The memorandum cited specific examples of such “collective interests,” such as essay contests on drug addiction. Although the memorandum indicated that certain UGC promotions targeting societal “collective interests” would be exempt, it did not go so far to state that the promotion could not have some good-will effect that benefits the sponsor. Thus, depending on the sort of UGC promotion contemplated, an international marketer may be able to include Italy in its promotional plan where it heretofore may have excluded that jurisdiction. The implications of the memorandum still need to be fleshed out in greater detail, however; and until the Ministry clarifies its position, marketers must evaluate on a case-by-case basis whether UGC contests are subject to the Decree.