As the holidays approach, more and more companies are launching contests, often in order to highlight a new product or service. This type of promotion is, however, not as innocent as it may seem, and it's important to avoid certain pitfalls.
Belgian law distinguishes between the following types of contests:
- A lottery is a contest determined solely by chance. Pursuant to the Criminal Code, a lottery is “any operation aimed at the public for the purpose of generating a gain through the drawing of lots". Free lotteries (i.e. those with no ticket price or with a ticket price equal to the purchase price of a product) also fall under this definition.
Lotteries are in principle prohibited under Belgian law, except for those organised by the National Lottery or in association with a charitable organisation. Violation of this prohibition can result in the imposition of both civil and criminal sanctions.
- A tombola is a type of lottery organised by a charitable organisation recognised by the Belgian Ministry of Internal Affairs (e.g. the WWF, Handicap International, the Special Olympics, etc.). The basic principle of a tombola is that a portion of the ticket price benefits the charity.
- In a skill contest, the winners are selected based on skill (e.g. answers to questions, provision of a specific work product, etc.). This type of contest is allowed, provided it cannot be considered a lottery due to the selection criteria. Indeed, a set of simple questions, followed by a tiebreaker with an unpredictable result, could be considered a drawing.
The general prohibition on lotteries, including those with prizes, is debatable.
It could in particular be argued that this prohibition is unlawful, as the purpose is not consumer protection within the meaning of Directive 2005/29/CE concerning unfair B2C trade practices.
Caution is however advisable, as the Belgian courts seem to apply the prohibition quite strictly. Recently, the following types of contests were found to be unlawful:
- According to a 2011 judgment of the Brussels Court of Appeal, a contest open solely to members of a non-profit organisation who had taken a trip with the organisation and completed a feedback form is a prohibited lottery rather than a skill contest;
- In 2008, the Turnout Commercial Court ruled that a contest in which three winners were chosen from amongst persons who had booked holidays before a certain date is also a prohibited lottery;
- A 2002 judgment of the Termonde Commercial Court found that selling boxes of sweets with a scratch card qualifies as a prohibited lottery and the fact that any purchaser can win a prize is irrelevant.
In addition, contests often offer an opportunity to gather the personal data of consumers. It is thus advisable to have the promotion reviewed from a data protection perspective.
Happy holidays and give wisely!