Prize promotions might have an easier life in Italy due to clarifications just issued by the Ministry that however do not sort all the issues especially for international and social media promotions.
Prize promotions in Italy
Italy is one of the countries with the most complex regulations on prize promotions. As already covered in this post, it is necessary to comply with a number of formalities including the delivery of the Ts&Cs of the prize promotion to the Ministry of the Economic Development at least 15 days prior to the beginning of the promotion, the posting of a bank guarantee equal to the value of the offered prizes and the certification by a public notary of the identification of the winners and the award of the prizes.
Additionally, all the activities relating to prize promotions have to be performed in Italy which requires for online prize promotions to at least have a mirror server in Italy and prevents to run international prize promotions! And the breach of such regulations is sanctioned with penalties up to € 500,000 that can be reduced under some circumstances.
The clarifications from the Ministry
The above applies unless the prize promotion falls under some exemptions to the applicable regime. And the Ministry has now clarified the scope of such exemptions that apply to prize promotions run for:
- The creation of literary, artistic or scientific works and
- The presentation of projects and studies relating to the commercial or industrial sector
where the prize to the winning work is either
- the consideration for the created work (e.g. when the promoter reserves the right to use the winning work for its business activity which might include a marketing campaign) or
- the recognition of the merits of the author (e.g. when an award wants to be granted to the best works) or
- an encouragement in the interest of the society (e.g. in cases like the ones of No. 1 above where the prize exceeds the value of the normal consideration).
The above exemptions apply according to the Ministry to promotions based on the participants’ skills. And in particular the scenarios No. 2 and 3 above apply when the public interest prevails over the advertising and commercial interests.
The Ministry in the past had adopted a very narrow approach in relation to the scope of applicability of these exemptions to prize promotion regulations, while it appears that a more flexible approach is now been followed.
The consequences for social media prize promotions and international competitions
In case of promotions falling under the exemptions above, Italian prize promotions regulations would not apply. And this is very good news for social media prize promotions and international competitions that have been subject to very stringent restrictions so far.
In particular, I covered in this previous post the solutions to be adopted for social media prize promotions, bearing in mind that – as covered in this post – Italian prize promotions regulations might be deemed in any case to be in breach of EU regulations in case of online promotions run by an entity based in a different EU Member State.
We will see the developments of the above, but in the meantime feel free to contact me, Giulio Coraggio to discuss. Also, if you want to receive my newsletter, please join my LinkedIn Group or my Facebook page. And follow me on Twitter, Google+ and become one of my friends on LinkedIn.