Facebook competition rules – are you gambling or winning?

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[Updated 7 March 2021] I get it. You see SOOOOO many businesses running competitions on Facebook and Instagram. Looks like a great idea, so you follow the leader. However, when you don’t know what you’re doing, it may be you’re taking a gamble rather than winning. In this comprehensive blog, we look at Facebook competitions rules and legal issues to make sure you know what you’re doing!


Why should you care about Facebook competition rules?

Everyone else does it, it must be okay. Right? Wrong! Think of it like speeding. I’m sure you’ve sped before (even if by accident of course 😉 ). Did that make it right? If you’re pulled over by the cops, is it a defence to say “Sorry officer, but everyone else does it, so who cares?”. Ahhh no. You did the wrong thing, you get caught, you get in trouble. Sure 99% plus don’t get caught, but it doesn’t make it right, and it doesn’t make it without risk. Like any risk you become aware of, you choose whether to accept it, mitigate it or remove it completely. The solutions below help you mitigate the risks.

Facebook competitions are governed by Facebook page guidelines and also by the laws in states and countries. Many competitions we see break both the guidelines and the law! Therefore, you risk having the competition deleted, having your page shutdown and facing legal consequences too! Listening yet?

Facebook competitions rules and guidelines

When you sign up to Facebook you agree to a long list of terms and conditions. Breaching those terms and conditions can see you removed from Facebook. Back in 2017 Facebook went on the rampage deleting many duplicate personal profiles which were against Facebook guidelines. It meant any business pages solely attached to the affected profile were also shutdown with it. Many business owners were left crying … but the Facebook rules or guidelines were always crystal clear.

Businesses clearly have additional rules and guidelines to follow, particularly Facebook competition rules. Please click here to access the current guidelines (always check to make sure this information is still current as we know Facebook is frequently updating). As at 7 March 2021 (with no change from our earlier blog updates of 12 Nov 2020 and 28 May 2020), the following is a specific guideline:

Promotions may be administered on Pages, groups, events or within apps on Facebook. Personal timelines and friend connections must not be used to administer promotions (e.g. “share on your timeline to enter” or “share on your friend’s timeline to get additional entries” and “tag your friends in this post to enterare not permitted).


Note the limitations are personal timelines. You could theoretically ask people to share on their business pages and with their business connections. This is however a little risky, for some additional reasons noted below.

Instagram promotion guidelines

Facebook/Instagram in mid to late 2020 introduced new separated promotion guidelines for Instagram only. It does not specifically prevent you from making a tag a condition of entry. There are some restrictions around tagging as noted below. Instagram now includes this clause in lieu of the no tagging still included in the Facebook guidelines:

You must not inaccurately tag content or encourage users to inaccurately tag content (example: don’t encourage people to tag themselves in photos if they aren’t in the photo).


Facebook disclaimer required

As part of Facebook competition rules for running promotions, you need to also provide a Facebook worded disclaimer. Promotions on Facebook must include the following, but also must adhere to applicable laws, and therefore you may need longer terms and conditions. Ideally, connect to a page on your website (another way of getting traffic there too).

Instagram has the same requirements (replace Facebook with Instagram).

A complete release of Facebook by each entrant or participant; and

Acknowledgement that the promotion is in no way sponsored, endorsed, administered by or associated with Facebook.


Facebook scans post for certain words

I’ve fallen victim to this before. I put up a post and the reach was like 4 people. At the time I though it odd, but was too busy to really care. Later in the week I went onto Facebook on the laptop and what do I see in the middle panel? A friendly post from Facebook ‘You used the word offer. It looks like you’re trying to sell, would you like to boost the post?’ I had used the word offer (but not in the context of offering something for sale) and Facebook deemed I was selling and therefore throttled the reach of the post.

It would appear* Facebook has done the same thing with the word tag recently (bad luck if you’re an Oz Tag club!) (* do not know for sure but it makes a lot of sense…). Therefore if you use the word ‘tag’ it may be taken to be from Facebook you’re trying to get people to tag friends and therefore will throttle the post. I say this because some people who had been running competitions with tag and share forever, found in the last six months their posts have very low reach and in some cases no entries at all! Test it out yourself, or look back on past competitions and check out your insights, and see if this is happening to you.

The law around Facebook competitions – maybe limit location

The bad news about being in a global world is that we need to adhere to the laws in every jurisdiction in which we transact. Therefore before running a competition, consider if you want to open the competition to entries from the world, or restrict to just people in your country or even your state. For instance if you are a local plumber, you may as well restrict entry purely to locals – may not even be statewide, could be postcode or council restricted.

NSW Law Change 1 July 2020

A number of laws came into effect 1 July 2020, but because of Covid they kind of snuck in under the radar. Some changes were made to the laws behind trade permits in NSW. Much to the benefit of small business and the removal of excessive red tape, the need for trade permits for all smaller chance-based competitions is no more! If your total prize pool for the giveaway is under AU$10,000 you no longer need a permit nor the new 1, 3 or 5 year authorities. To find out about the current requirements click here. The new rules apply to free entry giveaways for businesses and where people buy a normal priced item to gain entry. Please note although permits and authorities are not required, there are still required terms and conditions which must apply. Not-for-profits have different regulations.

The law – DLA Piper Promotions Around the World

Before you start thinking this is all too hard, a law firm I used to deal with in my former corporate life have an online tool you can use AS A GUIDE. Unfortunately, it hasn’t been updated since it was created in December 2018 so it doesn’t include, for instance, the NSW 1 July 2020 change. It at least prompts you as to what may apply so you know to investigate further or to limit access to your competition.

In order to assist you in determining what type of competition and what country you may be okay to run it in, you can select for instance Skills Competition from the dropdown and then hit all (don’t select a country unless you specifically want to know about the one place). To access this tool click here. They also have a great map showing risk levels for each country. Like anything always check to source, as the data IS out-of-date.

DLA Piper Promotions Risk Indicator (note grey means the countries are not covered)

Type of competitions

If you check out the DLA Piper promotions tool above, you’ll see ‘Skill Competitions’ are generally the easiest to run in multiple jurisdictions with the minimum of fuss. Facebook competitions in Australia can be run as skills based competitions in all states without the need for a trade permit, which can be needed for random prize draws, as it WAS in New South Wales (NSW). In NSW Australia all prize draws, random chance competitions require a trade permit NOW for when the total prize pool for the competition exceeds $10,000, whereas in Victoria a permit is not required. However, in both cases there are certain rules around the terms and conditions of the promotional giveaway, included what happens to unclaimed prizes. Remember you may need to buy permits/authorities for multiple states and countries if you want to offer more broadly.

A friend in early 2020 was contacted by local government because she was running a competition without a permit (pre 1 July 2020). It appeared she had been dobbed in (probably by a competitor). Remember the speeding analogy? In her case, they let her off with a warning, but she wouldn’t be so lucky next time.

Skills based competition when running multi locations

Because of the by jurisdiction legal requirements, it still makes most sense to run a skills-based competition so you can open your competition to more locations (unless you are a locals-only business). A great way to do this is:

Tell us in 25 words or less why you’d like to win XYZ prize.

Nominate and explain to us in 25 words or less, who you think would be the most deserving of XYZ prize.

These are great because apart from meeting legal requirements, they encourage long-form comments which helps Facebook recognise your post as a star. You can also use the comments as market research into your customer voice. The words they use to describe their challenges, the benefits they are seeking and can associate with your product or service. Therefore Facebook will share it more broadly organically. The second one may result in people tagging their deserving nominee, but you haven’t made tagging them a condition of entry, so it meets Facebook page guidelines.

Choosing a winner

You often cannot do a random draw or a chance-based draw as this is considered by many jurisdictions to be gambling. Hence why the states and countries have the laws. If you can run a random prize draw, because you’re in a limited location where allowed, or you’ve purchased all the trade permits/authorities you need, you can use a random winner generator. You can look on Google for them. Regardless, you will need to advise how and when you are selecting the winner in your terms and conditions. Also note what happens to unclaimed prizes in your terms. This IS a legal requirement in many jurisdictions including NSW.

One way can be your choice (and judges decision is final, no correspondence will be entered into), but that may be risky if you know some of the people. You could arrange for an independent judge to choose, or you could do something like the comment with the most likes wins. The latter can be great, because the entrant may choose to share their post to get their friends to vote for them. As it’s not a condition of entry, it doesn’t breach Facebook guidelines.

How to run a Facebook competition legally

Before running the Facebook competition

  • Decide on what you are offering as a prize and the purpose of the competition
  • Decide where you will offer and promote the competition
  • Review the state and country restrictions and choose the type of competition and the valid locations
  • Check and apply Facebook (and Instagram) guidelines
  • Choose your dates, create your Terms and Conditions (ideally get lawyer checked)

Promoting the Facebook competition

  • Create your copy – text and images, video etc
  • Create or edit your Terms page to include competition entry T&C
  • Post the competition (note it could be on Facebook or link to your website and run there)
  • Promote the competition to your audience, share in groups, spread the word
  • Consider advertising (can be an exception to the rule of not boosting posts). This applies if the entry is via the Facebook post, not if on the website. If a website competition then do a separate ad.

Drawing the Facebook competition winner

  • Draw the winner using your disclosed methodology on the set date
  • Announce the winner and disclose their details publicly as required
  • Ensure the winner receives the prize, or the unclaimed prize terms are followed
  • You may want to do a follow-up post as to how the winner used the prize (aka uder-generated content)
  • Review the success of the competition and note changes for next time

About the author Jane Tweedy

Jane is the Founder and Lead Trainer of FAQ Business Training. She loves helping business owners succeed by teaching them what they didn’t know they didn’t know. This minimises them getting ripped off, or ripping themselves off! Jane is a passionate supporter of small businesses who do the right thing, because she loves a level playing field. As a lifelong learner, her depth of knowledge covers a wide variety of areas. Jane loves to learn and test ideas, adapting and adding to BEFORE sharing them more widely.

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