A promotional contest is any contest, lottery, game of chance or skill, or mixed chance and skill, or if you’re otherwise disposing of a product or other benefit by any mode of chance, skill, or mixed chance and skill.
If you run a contest to promote a product or business interest, be sure to disclose all of the information required under the section 74.06 of the Competition Act. That information includes:
- the number and approximate value of prizes
- the area or areas where the prizes relate
- any important information relating to the chances of winning
In addition, to be compliant with the Act, you must ensure that the distribution of prizes is not unduly delayed, and that the participants are selected, or prizes distributed either randomly or on the basis of skill.
It is also important to ensure that your contest is lawful under other federal statutes such as the Criminal Code, relevant provincial statutes and local by-laws.
Remedies for non-compliance
If a court determines that a person has violated section 74.06 of the Act, it may order them to stop engaging in such conduct, to publish a correction, and/or to pay an administrative monetary penalty.
For individuals, the penalty for first-time violations is up to the greater of:
- $750,000 ($1 million for each subsequent violation); and
- three times the value of the benefit derived from the deceptive conduct, if that amount can be reasonably determined.
For corporations, the penalty for a first-time violation is up to the greater of:
- $10 million ($15 million for each subsequent violation); and
- three times the value of the benefit derived from the deceptive conduct, or, if that amount cannot be reasonably determined, 3% of the corporation’s annual worldwide gross revenue
Having a credible and effective compliance program can provide benefits in dealing with the Competition Bureau to resolve a violation of one of the legislation it enforces. A compliance program can also help:
- reduce the risk of potentially illegal conduct
- protect your brand and reputation
- detect instances of potentially illegal conduct at an early stage
- identify when others might put you at risk
To find out more information on written opinions under section 124.1 of the Competition Act, contact the Bureau’s Information Centre toll-free at 1-800-348-5358 or online. If a written opinion is provided by the Commissioner, a fee will apply based upon the section of the Act the proposed conduct or practice applies to. A written opinion is binding on the Commissioner as long as the facts submitted are accurate, and it remains binding if the facts on which the opinion is based remain substantially unchanged and your conduct or practice is carried out, as proposed. All fees and service standards for written opinions are set out in the Competition Bureau Fee and Service Standards Policy.