The New York Attorney General has caught the attention of the promotion industry after filing lawsuits against three major marketers in just six months over alleged violations of sweepstakes marketing practices.
At least three prominent industry attorneys discussed the litigation and its implications at the Promotion Marketing Association’s annual legal conference held last week in Chicago.
The three cases were against Tylenol, CVS and A&P Supermarkets.
One attorney, Stephen P. Durchslag, a partner with Winston & Strawn, said that there had been very little activity in New York, a state that has traditionally been liberal on its interpretation of laws regulating promotion. He said that New York, unlike Florida, had been a state that he didn’t have to send a delegation to to meet lawmakers and to “make friends.”
“It’s less friendly today,” he said.
Durchslag said it was important to remember that the actions were case specific and two were caused by promotions that were flawed—CVS and A&P. The Tylenol case was different in that it had minimal disclosure.
“The NY AG has indicated that it is not establishing new sweeps statutes, but that the lack of prominent disclosure is a problem, with the disclosure often buried in the copy,” he said.
In the Tylenol case, New York AG Eliot Spitzer settled last September with the maker of Tylenol, who agreed to stop running advertisements that make it appear that a consumer must make a purchase in order to enter the company’s sweepstakes. McNeil Consumer and Specialty Pharmaceuticals, a unit of Johnson & Johnson, also agreed to pay $52,000 in civil penalties and costs.
McNeil ran a sweepstakes—Survivor All-Stars-Tylenol Push Through the Pain Game—promoted in newspaper and magazine ads that in “large, bold print” directed the reader to “Buy Tylenol” as the first step of the sweepstakes. The grand-prize was a trip to the season finale of the TV series Survivor, AG Eliot Spitzer said in a statement.
TV ads broadcast on CBS included a voice over that said: “For your chance to win, just buy any Tylenol product,” but failed to say that no purchase was necessary to enter the sweeps. The caveat appeared in fine print at the bottom of print ads, the AG said.
About 84% of participants in the sweepstakes bought a Tylenol product, Spitzer said.
McNeil also agreed to make sure future ads do not imply that a purchase is necessary for consumers to enter a sweeps or that there is a greater chance of winning if a purchase is made.
In the CVS case, the state settled last July over allegations that CVS failed to provide an in-store method for entering sweepstakes for customers that did not make a purchase. CVS also agreed to pay $77,000 in civil penalties and costs. And, in May, A&P agreed to settle allegations that if failed to provide sweepstakes entry procedures for customers who did not make a purchase at its stores. That case ended in $38,000 in civil penalties and a requirement to make “dramatic” changes in the way it conducted sweepstakes.
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