How do we legally run an online contest for non-US participants?
March 27, 2008 3:50 PM   Subscribe

How do you run an online contest for contestants from any country in the world with real-world prizes (i.e. with $ value) and not spend tens of thousands of dollars on legal fees for compliance with each country's arcane rules? We had talked to lawyers before and they said you should limit to US participants only. The problem is half of our userbase is non-US and we don't want to exclude them. Any experience from anyone?

We saw that Crestock's contest was open to anyone in any country. We have no idea if they just bit the bullet and took the risk, or they decided to find a way to comply with any winners' home country rules, or there is a way to say something like "Void where prohibited; participants are responsible for making sure their entry complies with their local laws" and have that actually work. Lawyers have told us that doesn't really hold up.
posted by oaklandj to Computers & Internet (12 answers total) 5 users marked this as a favorite
Lawyers have told us that doesn't really hold up.

Their advice is more reliable than anything you will get here. If you want a second opinion with any value, seek a more prominent/experienced (and expensive) set of lawyers.
posted by The World Famous at 3:54 PM on March 27, 2008

It may not be merely a matter of slapping on a "void where prohibited" notice -- sometimes, the burden is on the contest organizer, not the contest entrant. For example, this article gives the reasons why many contests specifically exclude residents of Quebec, even when the target audience is, ostensibly, all of North America.
posted by mhum at 4:26 PM on March 27, 2008

Yeah its pretty much a nightmare, and thats why even huge companies (like pepsi or whatever) do their contests country-to-country.
posted by softlord at 4:40 PM on March 27, 2008

Since you're asking for legal advice on MeFi, I'm assuming your website is not that big. So here's the deal: You're overthinking things; just make sure that you comply with the laws of the countries that your website has a physical presence in. For the countries that you have no physical presence in, "void where prohibited" should be good enough.

Foreign laws have no sway over you - unless if they extradite you. Extraditions cost tens of thousands of dollars and innumerable hours of a lawyer's time. I highly doubt you'll get extradited for violating sweepstakes regulations in foreign countries. They can't even extradite con men, rapists, murders and pedophiles consistently... sweepstakes regulation violators aren't even on the authorities' radar.
posted by jytsai at 5:16 PM on March 27, 2008 [1 favorite]

Etsy on contests.
posted by ClaudiaCenter at 5:38 PM on March 27, 2008

BTW, next time a law student asks me for an idea for their writing requirement, I know what to suggest (developing a unform contest code or whatever for all the states and countries to agree on).

This contest figured out how to permit contestants from USA, Canada, the United Kingdom, Belgium, Denmark, Finland, Israel, Norway, Spain, Sweden, Switzerland, Australia, New Zealand, China, Taiwan, Hong Kong, and India.

Seems like this google contest figured out an even broader swath internationally (excluding "residents of Cuba, Iran, Syria, North Korea, Sudan, Myanmar (Burma), or to other individuals restricted by U.S. export controls and sanctions, and is void in any other nation, state, or province where prohibited or restricted by U.S. or local law").
posted by ClaudiaCenter at 5:53 PM on March 27, 2008

Is the non-US portion of your userbase really evenly distributed across the other countries of the world? Or are there large clusters of them in a few countries? Might it be easier to gear the contest to, say, the top five or ten countries you have users in?
posted by nebulawindphone at 6:00 PM on March 27, 2008

"Foreign laws have no sway over you - unless if they extradite you."

Or you ever want to leave the United States.

Don't ignore the laws of foreign countries just because you can't think of a way for them to enforce them.
posted by toomuchpete at 7:15 PM on March 27, 2008

I have been involved in defining the terms for a software development competition for Sun Microsystems (note that I am not a Sun employee, just an active participant in an open source project they sponsor).

Many perfectly reasonable rules we proposed were rejected by the legal department because they conflict with the laws of one country or another. I think Sun necessarily goes out of their way to ensure compliance because they do business in all of these places and they must respect those countries' laws to continue doing business there. However, perhaps that is not a concern for your company.

Assuming you're in the US, I can tell you that you absolutely need to ensure you don't allow citizens of those countries ClaudiaCenter mentioned. Failure to do so is not a violation of those countries' laws, it's a major violation of US law.
posted by tomwheeler at 8:42 PM on March 27, 2008

What about creating an offshore shell company based in the Caribbean, have your hosting there, forget the law and just do it? Just fly low under the radar.
posted by archae at 11:12 PM on March 27, 2008

The netflix prize has also gone thru this:

Residents of the province of Quebec in Canada are ineligible to participate. Residents of Cuba, Iran, Syria, North Korea, Myanmar (formerly Burma) and Sudan are also ineligible to participate. The Contest is void in these countries and where prohibited or restricted by law. Netflix reserves the right to limit, or restrict upon notice, participation in the Contest to any person at any time for any reason.
posted by mhh5 at 12:00 AM on March 28, 2008

Thank you all for your insights - I'm really glad to see the likes of Netflix & Google hosting contests with such broad reach internationally. Our users tend to be clustered in the Anglophone countries (US, CA, UK, AU, NZ, IN, etc) but we have a smattering of great users elsewhere, too. I'm pretty sure that we don't have any in Quebec, or any of the "axis of evil" countries like Cuba and Iran, so exclusions for them probably would be understood by our userbase.

Yes, our site is kinda small but we're VC-backed so have to be covered legally before we try anything.
posted by oaklandj at 11:07 AM on March 31, 2008

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