In an order, the Federal Communications Commission affirmed a court’s decision that radio station Saga Communications violated the FCC’s rules regarding broadcasts by not following its own contest rules.
A local radio station in Springfield, Massachusetts conducted a broadcast contest that included a sports memorabilia prize. Although the station’s own contest rules required delivery of the prize within thirty days, the recipient did not receive his prize until approximately seven months after the contest was held, and only after he complained to the FCC.
The FCC’s Enforcement Bureau issued a forfeiture order against Saga Communications, the licensor of the station, for $4,000, but the station appealed.
It argued that the FCC’s rules do not explicitly require that prizes be awarded promptly. But the Commission disagreed. The rules are not exhaustive of every element that is material to a contest, it said, and the Commission is allowed to properly interpret its own rules.
Further, the station’s own contest rules created an obligation to award prizes within thirty days, the FCC determined.
Although the station argued that the time period was intended to “persuade” winners to claim their prizes, not to impose an obligation on the station, “Saga’s own contest rule creates a reasonable expectation on the part of winners that prizes would be awarded within thirty days because winners are explicitly given thirty days in which to claim prizes, and a prize must be awarded in order to be claimed. Moreover, accepting Saga’s interpretation of its own contest rule would render it harmless from liability for ever failing to award a contest prize, effectively allowing it to claim that fulfillment would occur at some unspecified future time of its own choosing,” the FCC said.
Finally, the Commission said that because the station didn’t award the prize for several months, it made a “repeated” act under the rules that constituted a repeated violation, warranting a fine.
Why it matters: Contests or sweepstakes conducted under the purview of the FCC should be in compliance with the Commission’s rules as well as those of the sponsor conducting the game. The official rules form the contract between a sponsor and a participant when the material terms for the contest are set forth, so sponsors should avoid ambiguities when drafting their rules.