“It’s just a social media competition.” This phrase could accompany many marketing ideas. A product giveaway, a creative challenge, a prize draw among comments on a post, or a campaign promoted by an influencer. Everything seems ready to go live. But is it really?
Digital commerce has transformed the way businesses communicate with consumers. Today, a simple Instagram post, a TikTok video or an influencer’s recommendation can trigger a purchasing decision. However, behind every campaign lie legal obligations that businesses should understand and anticipate.
When a client approaches us to organise a promotional competition or prize draw, the first question we ask is: “How will the winner be selected?” The answer provides the starting point for determining the legal framework applicable to the campaign and establishing whether prior administrative authorisation is required before its launch.
This is precisely where we believe legal advice makes a difference: not by restricting creativity, but by helping to turn an idea into a campaign with clear, consistent rules that are appropriate to the company’s objectives.
Simply describing an initiative as a “skill-based competition” is not sufficient to exempt it from authorisation requirements. What really matters is how the prize is awarded. Games of chance are subject to their own legal framework, which is distinct from the regime governing related activities under which promotional prize draws may fall.
Where the awarding of a prize depends on chance, or on a combination of chance and skill, the campaign may fall within the related activities provided for under Portuguese Decree-Law No. 422/89 of 2 December. Once this classification has been established, prior administrative authorisation is mandatory.
Conversely, a competition that rewards merit exclusively, such as the best photograph or slogan selected by a panel of judges according to previously defined and communicated criteria, will, in principle, fall outside this authorisation regime, without prejudice to compliance with other applicable legal obligations.
Where authorisation is required, it must be obtained from the competent Portuguese municipality, namely the municipality within whose territory the initiative is restricted or, where it covers a wider geographical area, the municipality in which the promoting entity has its residence or registered office, in accordance with the applicable legal provisions.
The procedure involves preparing the application and the competition or prize draw terms and conditions, gathering the required documentation and complying with the applicable requirements and fees. The relevant conditions and deadlines should be confirmed with the municipality concerned. A campaign should not go live before its legal requirements have been properly addressed.
In our experience, well-drafted terms and conditions should explain, without ambiguity, who is eligible to participate, what participants are required to do and under what circumstances they may win. Their content must accurately reflect how the campaign will operate and remain consistent with the message communicated to the public. Identifying the promoter, defining the geographical scope and relevant dates, establishing participation requirements, describing the prizes, regulating the selection and notification of winners, and setting out the arrangements for prize delivery are all essential elements. It is equally important to address exclusions, technical issues, potential amendments and the processing of personal data. Clear rules help prevent uncertainty, disputes and unrealistic expectations.
However, businesses’ legal obligations do not end with the rules governing competitions and prize draws. The increasing use of influencers in marketing strategies has created new legal challenges, particularly regarding the identification of advertising content and transparency in commercial relationships.
An apparently spontaneous recommendation, the promotion of a discount code or the presentation of a product received free of charge may constitute a commercial communication where a promotional relationship exists between the brand and the influencer. In such circumstances, consumers must be able to identify clearly and unequivocally that they are viewing advertising content, as required by Article 8 of the Portuguese Advertising Code.
The use of labels such as #ad, or other clear and immediately recognisable disclosures, helps identify the commercial nature of a publication. Transparency is not merely good practice; it is a legal requirement that applies regardless of the platform used or the size of the influencer’s audience.
Businesses engaging influencers must also ensure that the content published complies with the applicable legislation. Identifying commercial partnerships, ensuring the accuracy of information communicated, establishing the conditions governing the use of images and other content, and clearly allocating contractual responsibilities between the parties are matters that should be addressed before any campaign is launched.
It is important to remember that an advertising campaign conducted through influencers is not exempt from other applicable legal obligations. Accordingly, where an influencer promotes a prize draw or competition on behalf of a brand, it will also be necessary to assess the relevant legal framework and, where applicable, obtain prior administrative authorisation.
These considerations form part of a broader approach to legal advice in digital advertising, e-commerce and consumer protection. From a consumer’s first interaction with an advertising campaign through to the completion of an online purchase, it is essential to ensure transparency regarding prices, discounts, terms of sale, deliveries and consumer rights, as well as compliance with personal data protection legislation.
Addressing these matters proactively enables businesses to develop their commercial strategies with greater legal certainty, avoid disputes, reduce compliance risks and strengthen consumer confidence.
In a market where a social media post can turn into a purchase within seconds, legal compliance must accompany the entire customer journey, from the first click through to after-sales service.
Belzuz Abogados, S.L.P. is an International law firm headquartered in Madrid, with offices in Lisbon and Porto, experienced in advising domestic and international businesses on digital advertising, promotional campaigns, competitions and prize draws, e-commerce and consumer protection.