Web 2.0: Prize Competitions and Social Media

Prize competitions run on Social Media can hide unexpected regulatory surprises for entities interested in advertising their products/services. Indeed, we have already discussed about the complex regime applicable to prize competitions under Italian law and also of the recently increase up to € 500,000 of the applicable fines in case of breach of the applicable regulations.

In case of prize competitions run on Social Media there is an additional issue to consider: Italian law prescribes that any activity relating to the promotion has to be performed in Italy. This implies also that the servers on which the competition is run has to be on the Italian territory while on the contrary the most popular Social Media have their servers in the United States.
How to solve this issue? A potential solution might be connect the page of the Social Media on which the promotion is advertised to a mini-website whose servers are located in Italy, but it is important to properly arrange this mechanic to avoid on one hand the breach of the applicable prize competition regulations and on the other hand the potential breach of consumer protection regulations.
Finally the proper functioning of the software through which the competition is run shall be certified by an expert and the certification shall be attached to be minutes of closure of the competition drafted by the public notary.
Need more information on the above? Feel free to contact me, Giulio Coraggio (giulio.coraggio@dlapiper.com).