material terms of contest entry

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The FCC’s Enforcement Bureau this week issued two fines, one for $6000 and another for $5200 for violations of its contest rules, as the contests were not conducted as advertised.  In each of these cases, a prize winner was not awarded a prize in a timely manner.  In both cases, the prizes were not provided to winners even after the winners inquired, and, for one reason or another, the stations did not immediately respond to the prize winner to resolve the issue – instead providing substitute prizes only when FCC complaints were filed.  Even though both prize winners appeared satisfied by the substitute prizes and withdrew their complaints, the FCC nevertheless issued the fines finding that the contests had not been conducted as promised, in that the original prizes were not awarded on a timely basis.  While in both cases the delays appeared to simply be the result of station staff not making a priority of determining how to deal with delivering the prizes, these cases serve as a warning to broadcasters to review their contest rules and make sure that station staff understand that, if an unexpected glitch arises, they should not dawdle in working to resolve those issues.

As we have written before, the FCC requires that broadcasters adopt written rules for contests disclosing all material terms of those contests (see our posts here here and here that talk about some of the material rules that need to be covered) and make those rules available to the public.  While the rules can now be posted online instead of having to be read on the air, the station must still alert listeners through on-air announcements as to where those rules are available (see our articles here and here).  In writing their contest rules, the station should anticipate all the glitches that might occur in the contest process and spell out what will happen if one of these problems crops up.  Obviously, a prize becoming unavailable is a frequent issue.  Technical glitches also can become issues (e.g., phone lines not working or text message programs misidentifying the proper winner).  These should be anticipated, with explanations of what will happen should any of these occur.  What will happen may differ if the glitch occurs before the contest has been conducted (where you need to decide how to treat those who already entered) or after the prize has been awarded (e.g., as in this week’s cases, where substitute prizes were given).  Anticipate the unexpected.
Continue Reading Two FCC Fines for Contests Where Prizes Not Awarded on a Timely Basis – What Broadcasters Should Watch Out for in Conducting Contests

Earlier this week, our friends at the broadcast and digital media consulting and research firm Jacobs Media posted an article on their blog called “What Could Possibly Go Wrong,” dealing with the financial and reputational issues that can arise if a contest is not fully thought out. That article reminded me of all of the legal issues that we have written about over the years that can arise if all of the issues with a broadcast contest are not carefully considered. Those potential issues range from the an FCC fine if the contest is not conducted as advertised, to the threat of civil liability if the contest results in an injury to a contestant or observer. I thought that I would highlight some of the articles that we have written in the past to remind broadcasters of those potential liabilities.

On the FCC side, the FCC has always been a stickler on the rules, requiring that broadcasters, when conducting their own on-air contests, announce the rules of those contests and to follow those rules as announced. While that burden has become somewhat lighter in the last year as the FCC has allowed stations to publicize the material rules of a contest on a station’s website rather than having to announce them on the air (as long as the on-line location of those rules is itself publicized sufficiently on air, see our post here), that rule change has not affected the underlying obligation of a broadcaster to conduct the contest as announced, in accordance with the contest’s announced rules.
Continue Reading What Could Possibly Go Wrong With a Broadcast Contest? – From the Legal Side

Today, the FCC published notice in the Federal Register of the adoption of the new simplified rules for publicizing the material rules for contests conducted by broadcasters. This publication was for purposes of review by the Office of Management and Budget under the Paperwork Reduction Act, a review necessary before any new rules requiring…

In recent years, the FCC has been to aggressively enforcing a policy requiring broadcasters to announce all material rules of a contest on the air enough times for a reasonable listener to hear the announcements.  This past week, there was yet another case where this policy was enforced, resulting in a $4000 fine to a broadcaster.  While the FCC continues to enforce this policy, at least one broadcaster has reportedly decided that a fine for not having broadcast of the material rules of a contest is not justified, and is apparently ready to take the FCC on in Court in a case where the FCC tries to enforce a fine issued several years ago.

The newest fine involved a station in Cleveland, which ran a contest called "Who Said That" where a clip of the voice of a sports figure was played on the air.  The first person to be able to identify the speaker won a prize.  Apparently, if no prize was awarded, a new prize was added each week until the voice was identified, when the winner would get all of the accumulated prizes.  In this case, the station ran an announcement about the rules regularly until the station aired a clip that was not identified for some time.   As the clip remained unidentified over the course of many weeks, and then many months, the station apparently became less rigorous about announcing the rules.  But, more importantly to the FCC, the station did not announce on the air all of the prizes that had accumulated, nor did it announce that some of the prizes had become unavailable and had been replaced over time by prizes of what the station considered to be of an equivalent value.  As the station had not announced the "extent, nature and value of the prizes," the FCC found the station to be in violation – even though the right to substitute prizes of equal value was contained in the written rules published by the station.Continue Reading FCC Fines Another Broadcaster For Not Announcing All Rules of a Contest – While One Broadcaster Protests

In three recent cases, the FCC revisited the issue of broadcast contest rules – fining stations for not following the rules that they set out for on-air contests, and reiterating that the full rules of any contest need to be aired on the station (see our previous post on this issue here).  The most recent case also made clear that a broadcast station’s contests that may be primarily conducted on its web site are still subject to the FCC’s rules if any mention of the contest is made on the broadcast station.  Thus, even though the contest itself may be conducted on the website, with entries being made there and prizes being first announced on the site, if the station uses its broadcast signal to direct people to the site to participate in the contest or otherwise promote it, the broadcaster must announce all of the rules on the air.

In one case, a listener called a station with what she believed to be the correct answer to a question that needed to be answered to win a prize.  The listener gave the answer, only to be asked a second unexpected question that she did not answer correctly.  The next day, she heard another listener call in, answer the original question in the same way that she did – and win the prize without ever even being asked the second question.  When the first listener complained, station employees agreed that the second question was not part of the rules, but did nothing to correct their mistake until after the listener filed her complaint with the FCC.  The Commission fined the station $4000 for failing to follow the contest rules and for failing to fully publicize all of the material terms of the contest on the air. Continue Reading Broadcast Station Contests – Announce the Full Contest Rules and Follow Them