Fast Talkers Not Needed: FCC Updates “Contest Rule”

Times have changed, and the FCC has noticed. For almost four decades since 1976, we have heard fast talking announcers on radio and television, rushing through legal disclaimers at the end of commercials for contests. The FCC’s “contest rule” had required full disclosure on air of material terms of a contest or sweepstakes. (See 47 C.F.R. Section 73.1216.) Recently, the FCC adopted revised rules that would allow broadcasters to refer consumers to an Internet website instead of reading contest rules on air.

The FCC explained its change: “given the ubiquitous nature of the Internet and current consumer expectations about how to obtain information, broadcast disclosure of material contest terms no longer reflects the best means of conveying such information to the public in all cases.”

The FCC has not altered its requirement that broadcasters disclose material terms of a contest. Now, however, the disclosure can be online. The FCC made detailed recommendations, and here are the highlights:

• The website used for disclosure must be free with no registration requirement and available to the public 24 hours a day.
• Short form addresses and hyperlinks are acceptable on air disclosures so long as they are mentioned “periodically”. The FCC expressly refused to define the frequency required. Presumably, interpretation of the word “periodically” will require judgment calls by legal consultants, experienced in analyzing these kinds of disclosures. Be aware, however, that the FTC’s Dot Com Disclosure Guides may also impact these determinations, particularly with regard to the use of hyperlinks.
• The website homepage must include a conspicuous link or tab to the contest information.
• Disclosures must remain on the website for at least thirty days after the contest expires.
• On air disclosures must be substantively the same as website disclosures.
• If the material terms change after the broadcaster announces the contest, the broadcaster must make on air disclosure of the change within 24 hours and periodically thereafter. (The FCC notes that this would happen rarely. A fundamental tenet of sweepstakes laws still applies: changing the rules should be an exceptional circumstance and can only happen if the rules are written to allow the change.)

The old FCC “contest rule” remains in effect until the FCC’s Office of Management and Budget approves the revised rules. It is important to remember that nothing in the new rules changes how to determine the content of disclosures. The only change is where the disclosures can be made.

Broadcasters, like all contest promoters, should still evaluate their promotions to determine what disclosures should be made in advertising. Generally, how to enter (including any alternate methods of entry), eligibility requirements (including voided states), dates, and where to find the official rules are crucial material disclosures. Depending on the promotion, there may be others as well. Once the FCC approves its new rules, however, we will not have to listen to announcers speeding through these disclosures on air.