Key legal considerations for running giveaways in multiple countries

What’s legal in one country might break the rules in another – here’s how to run a compliant, cross-border giveaway

If your brand has a presence in multiple countries or you are in the expansion process, you can carry out an international giveaway to build awareness and create engagement. However, as we’ll see, these are much complicated than giveaways in one country.

This is because different countries have different regulations around giveaways. In fact, some are so tough you can’t really combine them with most other countries.

So, how do you navigate all these, knowing that a lack of legal compliance can shut down your campaign or lead to huge fines? Today, we’ll look at the various considerations you need to prioritize.

Understand local laws around chance vs. skill

When designing global giveaways, the first thing you need to do is define whether it’s chance-based or skill-based. It may sound minor, but these two usually have different laws in most countries. If your campaign is accidentally crosses to a side you didn’t intend, it can immediately become illegal.

Let’s start by looking at what each really is.

In promotions based on pure chance, the winners are picked randomly. But in skill-based giveaways, the participant will make an effort, such as submitting an original photo, and the winner is judged on merit.

The randomness of chance-based giveaways makes them a bit similar to gambling, so such promotions usually have stricter regulations. For example, in Belgium and Canada, they are strictly prohibited. You have to introduce a skill element to avoid it being termed as an illegal lottery.

Skill-based promotions are easier to run internationally as they don’t have strict regulations. However, you’ll still need to ensure legal compliance with different competition laws. For example, some countries establish a judging criteria to ensure fairness.

Align with data privacy and consent laws

During your global giveaways, you’ll need to collect user details such as names and email addresses. For winners, you’ll also ask for an address, and probably tax details.

This means that you’ll need to comply with data privacy laws in all countries in which you want to operate. Some are strict, others aren’t.

For example, in the EU, there’s the GDPR. It will need you to get clear consent, process data lawfully, and clearly explain how you’ll use collected data. In California, the CCPA will need you to give users the right to access and delete their data.

Ensure you go through these international regulations in each country you want to operate in.

Be transparent with your terms and prize details

Your terms and conditions will let users know what to expect, but more than that, they’ll protect you. This means that you need to be transparent about everything, and on top of that, you need to include the details required by different countries.

Start with the basics of the competition like the eligibility criteria, entry methods, and promotion period (with time zones). You can then provide the gift details. Here, a “dream vacation” won’t cut it. List the destination, with details around flights, accommodation, and meals.

Consider prize legality, delivery, and tax details

What might be acceptable in one country may be illegal in another. For example, in most Muslim-majority countries, Alcohol prizes may be restricted. Other countries like the Netherlands cap prize values, while others may require special certifications for specific prizes.

On top of that, you’ll need to consider the delivery deadlines. For example, Brazil requires delivery within 30 days but Italy allows up to 180 days.

Lastly, consider the tax implications. Dig through the details to ensure legal compliance with everything, including withholding taxes. This will ensure that your global giveaways are compliant and don’t attract penalties or legal action.

Planning a global giveaway? Make sure your promotion is legally airtight. At Promosfera, we have 19 years of experience managing compliant campaigns in over 85 countries.

Reach out to ensure your next giveaway meets local laws, wherever your audience is.