Advertising Law Blog

Promotions are constantly embracing the latest technology and trends in an effort to capture the public's attention. Currently, Web 2.0 is shaping the Internet and is a driving force behind many promotions. Creating a "Web 2.0 Promotion" presents many new legal challenges that must be considered and carefully evaluated.

What is Web 2.0?

According to Wikipedia, Web 2.0 is a phrase coined by O'Reilly Media in 2004, that refers to a supposed second-generation of Internet-based services - such as social networking sites and communication tools, - that let people collaborate and share information online in previously unavailable ways. O'Reilly Media, in collaboration with MediaLive International, used the phrase as a title for a series of conferences and since 2004, it has become a popular (though inconsistently-defined and often criticized) buzzword amongst certain technical and marketing communities.

One of the first social network sites to reach the masses was MySpace, a site designed to encourage community, sharing and friendship. Almost overnight, YouTube, a site that was founded in February 2005, has become a phenomenally popular site where anyone can upload videos for the world to see. YouTube was recently acquired by Google for a staggering $1.65 billion). MySpace and YouTube, as well as other well-recognized social sites, such as Facebook and Digg, embody the movement of Web 2.0, that democracy and open markets rule the Internet.

YouTube describes itself as a place for people to engage each other in new ways by viewing, sharing and commenting on videos. YouTube originally started as a personal video sharing service, and has grown into an entertainment destination with people watching more than 70 to 100 million videos on the site daily.

Not too long ago, the idea of uploading and distributing video entertainment over the Internet was considered a unique and novel idea. But rapid progress in broadband penetration finally reached critical mass and has led to rapid growth of video-sharing sites. According to a report released by Nielsen/NetRatings, the total number of home broadband users has grown 30%over the span of one year, from 78.6 million in May of 2005 to 102.5 million in May 2006.

User-generated content, now common on YouTube and MySpace, includes videos, song and photos created by nonprofessionals and shared with the world online. Many companies are looking to capitalize on the buzz created by Web 2.0 and user generated content. Some are even going so far as to hold ad-making contests, with winners getting money and their spots used.

Examples of Web 2.0 Promotions

Web 2.0 Promotions allow a marketer to get consumers intimately involved with a brand or a project. For example, Doritos has launched a promotion called the "Super Bowl - You Make It. We Air It" that allows entrants to submit a Doritos commercial where a judging panel selects the best five videos. In the next round the public votes for their favorite, with the winning video being a real Doritos commercial aired during this year's Super Bowl. Singer Janet Jackson generated some on-line publicity by having her fans design the cover of her forthcoming compact disc.

At the other end of the spectrum, Ckrush, Inc. is creating the first feature film where the staring actors and actresses as well as the director will be selected exclusively by an online community. To be eligible for a prize (starring role or the right to direct the movie), members of LiveMansion.com, a free membership site, are required to upload content such as pictures and videos. Other members of the online community then review the entries and through a series of rounds select who should be cast for various roles and as the director.

The winners of the Doritos and LiveMansion promotion will be selected solely or largely by the voting public. The idea of giving the public the power and ability to decide who wins is not new, and builds on the reality television craze that peaked with American Idol.

Unique Legal Challenges to Web 2.0 Promotions

As promotions embrace the concept of Web 2.0, new and unique legal challenges arise. The concept of having a promotion center around user-generated content and giving the public the power to decide the winner can create a high publicity and successful promotion.

Copyright Infringement

Video sharing sites involved in a promotion have increased exposure for copyright infringement when they post or permit the posting of content that is owned by someone other than the submitting party. This is an ongoing unresolved challenge because video is typically submitted from someone who is not the copyright owner. This becomes particularly problematic when the promotion sponsor hosts the videos and also gains financial remuneration, either directly or indirectly. YouTube's current policy is to remove clips after it is put on notice of unauthorized transmissions. For example, recently, YouTube deleted approximately 30,000 files after a Japanese entertainment group complained of copyright infringement.

But like Napster before it, YouTube's policy is not without risk. This past summer, YouTube was sued by the Los Angeles News Service in federal court, alleging copyright violation for having posted video footage of truck driver Reginald Denny being yanked from his truck and beaten during the 1992 Los Angeles riots. The news service alleged YouTube used their copyrighted material without permission or compensation. YouTube has maintained that the suit is without merit, citing the Digital Millennium Copyright Act.

Non-Monetary Consideration

A Web 2.0 sweepstakes also presents unique non-monetary consideration challenges. Standard promotions always run the risk of being either illegal or subject to additional laws if they charge a fee to enter. Non-monetary consideration occurs when,although a fee may not be charged, an entrant is required to expend substantial time or effort on his promotion entry and the sponsor benefits from those efforts in some way.

Although we are unaware of any recent legal challenges to any promotion on the basis of non-monetary consideration and there are very few clear lines as too how much non-monetary consideration constitutes too much, a sponsor should nevertheless explore creating an alternative method of entry that would allow for a method of participation that does not require substantial non-monetary consideration to enter.

Under Age Youth

Although America's next generation is force pushing Web 2.0, if a promotion states that only individuals 18 years and older are eligible to participate, the promotion's sponsor should ensure the minimum age requirement is enforced and entries submitted by underage participants are taken down.

Other Issues

Other issues to consider in creating a Web 2.0 promotion include having the promotion rules clearly state how long and what file format the content should be. Video length is especially important in skill contests where the promotion sponsor is responsible for judging the entries and is obligated to review each one. The IT department should be consulted to ensure there is enough bandwidth for the anticipated response.

As with any promotion, we recommend that the rules have a catch-all provision that allows the Sponsor to remove entries are not appropriate or that may cause a public relations problem. Sponsors should considering including restrictions such as "Entries that are lewd, obscene, pornographic, disparaging of the Sponsor or otherwise contain objectionable material may be disqualified in the Sponsor's sole and unfettered discretion."

Conclusion

In years to come Web 2.0 will continue to be an important part of the Internet's evolution. Companies looking to capitalize on this movement need to be aware of the new and unique legal challenges that face Web 2.0 Promotions.