Consumer Competitions in 2017

Schaffer News

The 2017 amendment to the Gambling Games Act lifts the ban on consumer competitions, for whose organisation may be, while meeting legal criteria, applied for. The new law, however, does not directly contain modifications of the consumer competitions itself.  

Consumer competitions are dealt with in the Consumer Protection Act and they are defined as “a competition, survey or another similar event for prizes organised for consumers in a direct connection with advertising, offers or sales of products or services of the seller, while this seller or their representative commits themselves to award the participants financial or non-financial prizes by means of random choice on condition that the participants purchase a specific product/service and prove such purchase by the related receipt or contract, or take part in the sellers marketing event either in person or through a representative.” As such, such an event is deemed a business practice aiming at a consumer and may not be a dishonest, misleading or aggressive one, which is to be judged by the Czech Trade Inspection Authority and, if found to be one, severely penalised.   

A dishonest business practice – i.e. a banned one – is one which is in contradiction with the requirements of a professional care and substantially violates (or is liable to) the business behaviour of the consumer. Also, aggressive practices are prohibited – generally, they are those which seriously threaten (or are liable to) the freedom of choice or behaviour of the consumer in relation to the product/service by means of annoying or unduly affecting pressure on the consumer’s integrity so that they would make decisions towards (un)buying the product which they would not do under regular circumstances. Ergo, the Consumer Protection Act primarily stresses that the consumer competition must not influence the participants in an undesirable fashion to purchase certain products or services. The assessment whether the rules of the events do not violate the law is always highly individual.  

Consumer competitions may not have the character of a gambling game or a bet as stipulated by the Gambling Games Act since these may only be organised by subjects which have been granted a relevant permit by the Ministry of finance. The consumer competitions, on the other hand, do not require any permission.  

If a consumer competition, then, does not fit the definition of a gambling game and is not deemed a dishonest, misleading or aggressive business practice, it will be possible to organise it without any legal restriction. New Gambling Games Act is also accompanied by an Act on Gambling Games Tax.