Podcast

Ethan

Welcome to the social media lawcast. I am your host social media attorney Ethan Wall and with me is my friend and co-host Shawn DePasquali. What's up dude?

Shawn

Hi I'm here What? what? Why have you summoned me this early in the morning. Okay, what gimme.

Ethan

Ah, so it's all it's almost Halloween ah trick or treaters are coming out but there's been a major trick pulled by the Reese's corporation at least?

Shawn

Oh are they're putting razor blades in their candy right? I've heard about this this happens all the time. Oh oh, not this? Oh okay, all right? No so so what did Reese's corporation oh ah

Ethan

If yeah, this is far this is far worse. This is far worse Sean and razor blades in candy. Yeah.

Shawn

Oh oh, oh well hold on all right? What is worse than razor blades and candy tell me.

Ethan

Only 1 thing and according to the associated press. It is the reess corporation potentially violating sweep stakes laws. Yeah I know right.

Shawn

Who won't the 1 think of the children. Um, okay so what did they do. Break this down for me how what is the sweep stakes and why is why is why did they break? Why did they break the law or potentially break the law.

Ethan

Okay, so the situation here there was a consumer advocate that saw packages of Reese's peanut buttercups and on them. It said um, have a chance like get by a Reese's have a chance to win $25000 see details inside the package.

Shawn

Um.

Ethan

You then buy the reeses you open up the package and on the inside it said no purchase necessary so we have a situation where. Reese's had to allow people to play the game for free and we can discuss why and what those sweepstakeaks are but you didn't know until after you bought the candy opened up the package and realized you could have had a chance to win 25 grand without spending two three dollars on your Reese's peanut butter cups.

Shawn

Share I mean.

Shawn

So normally in these situations I feel like I do see Soeb stakes and then underneath in really tiny letters no purchase necessary. That's usually what they do right? and then the rules are in the back or on the inside or something So in this case, they just.

Ethan

Um, yeah, or or they they hit it inside the package probably not intentionally.

Shawn

The the mistake was they didn't put no purchase necessary like if they had just put that right? But if they had just but if they had put it in like tiny tiny letters on the front that would count.

Ethan

Kind of in a way. So let me explain why this is a big deal and what they could have done or what they should have done differently because I so um, um, anticipating is likely going to be an absolute massive recall of these Reese's peanut butter cups or something to be able to kind of change.

Shawn

Look at.

Shawn

Front.

Ethan

This mistake before they get into some big legal trouble. So when you have a giveaway when you're giving away something these things are governed by laws and it's true. Whether you are a mom and pop selling I don't know these cool Halloween tiny plants that they painted.

Shawn

And.

Ethan

Or if you're the gigantic reess corporation laws are the same and so giveaways can fall into one of a few categories one is lottery and others are sweepstakes and and contests and so when you have a game where a winner is picked at random. It's either going to be a lottery or a sweepstakes The only problem is that only states. Like state of Florida or Colorado have the right to run lotteries companies can only run sweepstakes and the difference between a lottery and a sweepstakes is. They're both a game of chance where a winner is picked at random. But for lotteries you have to pay to play like you buy a lottery ticket at 117 but for sweepstakes one of the key things is you have to allow people to play for free and that way you can give something away to someone who wins at random but not be considered a lottery because you have the ability to play for free. But here Reese has said you can win 25 grand buy our rees but not until you bought. Reeses and open up the pack. Did you realize you can actually play for free and so that's kind of what's happening here and there are both civil and criminal penalties potentially for violating these sweepstakes laws.

Shawn

Um, right community.

Shawn

So then yet if if they had just put no purchase necessary somewhere on the outside of the package we wouldn't be having this conversation.

Ethan

Exactly or a little bit more long little bit more disclosure so in order to run a sweep stakes legally you have to allow people to play for free and you have to have official rules. Official rules are super long so you can't fit these things onto a package and so what the law says is that you can use what are called short form disclosures. And usually says something like no purchase necessary Void were prohibited open to us eighteen plus something like that see complete rules for details. But the main crux of it is.

Shawn

Right.

Ethan

No purchase necessary language and if they left everything else out and just said no purchase necessary see terms see reeses.com/giveaway for details that would have been fine. That's not what happened here.

Shawn

But so so this this is less a malicious error and more a complete oversight like just something someone looked at this final packaging and went Yeah, that's fine. And and maybe it didn't go to the right Attorney's eyes or whoever was looking at it wasn't you know had a bad day and just didn't go like yeah we should throw this language on there. Um, so to your point a recall would pull all these packages back and then they would reprint them. And then they would re push that out and the contest would be fine and no one gets hurt right.

Ethan

Um, well maybe first of all, it's a sweepstakeaks, not a contest which is just another interesting component because we only have a short episode today about the differences between the contest and the sweepstakes and there are different laws that govern a contest a game of skill. Such as a free throw shooting contest or who can eat as many Reese's peanut butter cups in 60 seconds where there's like an objective winner versus sweep steaks where a game is picked at random because you don't have to let people play for free for contest. You can actually require people pay because there's no random drawing but. Yes, what might be happening here is I agree with you I don't think that reese' is a malicious corporation trying to run an illegal lottery through peanut butter cups. But according to the Ap News article the consumer advocate who reviewed this said that reese' did this contest earlier or excuse me sweepstakeaks. Earlier in the year and also didn't comply with the law so someone at the reese' company isn't paying attention to complying with these laws and at some point what happens is the attorney generals will file a lawsuit against Reese's and and find them.

Shawn

Oh.

Ethan

Or have cease and desist letters or have certain types of penalties to prevent these types of behavior from happening in the future. Just think about this Reese's peanut butter cups are everywhere in every gas station supermarket the amount of money that it's going to cost Reese's to do a potential recall.

Shawn

Um, yeah.

Ethan

Or try to fix this problem is going to be millions of dollars this is a massive mistake that this company made and it's a good example for other companies that are out there of what the potential legal liabilities can be and what happens if you don't run these giveaways carefully.

Shawn

Yeah.

Shawn

That's crazy So A better legal team would have helped in this situation or at least a stricter process of hey before this packaging is approved and finalized and sent to print. A lawyer needs to look an internal you know I mean and for this corporation's instance it would be like an internal lawyer should probably look at this to make sure we're following all of our sweepstakes laws right? yeah.

Ethan

Reese is a stuff a team of lawyers. They probably have more lawyers than there than there are you know people in the in in podunk wyoming like there's probably dozens and and they're probably not all responsible for this. But yeah, this this is pretty big because usually what we see at the social media law firm is a couple things.

Shawn

Right.

Shawn

Yeah, yeah.

Ethan

Usually we get a call from someone saying hey I'm going to run a giveaway I have absolutely no idea what I need to be doing but I need to be able to comply with the law. Okay, or we've got a gigantic established company saying like we're going to give away a tesla and we just need to cross all the the T's and dot all the I's um, so so companies.

Shawn

Um, mem.

Ethan

Now know that there are laws that they need to be able to follow the fact that this went through a giant company rees is whoever kind of owns a on of it's Mars or nestle or somebody know and this kind of wasn't picked up is yeah, it's it's ah it's a make your own type or company like that.

Shawn

Um, yeah, crazy. Yeah, that's crazy. Yeah, it's Crazy. It does seem like ah it seems like an insane oversight like ah like a breakdown in their internal process. Of like this shouldn't if we're doing a sweepstakes that packaging should not be approved until an attorney has signed off and so either an attorney signed off and was drunk at the wheel or it missed that part of the process and just.

Ethan

Yes, and.

Ethan

Yeah, and it's crazy I mean tell you a couple things that happened just recently I had 1 one client that I'm not going to name kind of reach out to me that was operating within the state of Michigan that got a letter saying you're running illegal lotteries. You can no longer operate in the state of Michigan anymore.

Shawn

Didn't get the sign off which is crazy. That's wow. That's wild.

Shawn

Oh wow.

Ethan

And they had to relocate their entire company to another state in order to keep doing business I had another client recently? Um, who ran a national sweepstakes that was in supermarkets and the sweepstakes was run lawfully they had the rules but they messed up the product packaging and had the wrong dates.

Shawn

Okay.

Ethan

On when the giveaway started and ended and the same thing they're like what's going to happen and the Ftc or the Federal Trade Commission can come after them for certain types of penalties. They had to spend more money than they probably would have made running this giveaway having to fix all the product packaging. So if they didn't take any action then there. Kind of face even larger legal penalties.

Shawn

Crazy That's crazy it it and like the way worse and it seems like the purpose of these kinds of things These kinds of sweepstakes is to like get people to buy stuff right? You can't force them to buy it.

Ethan

Um, totally worse than razor blades and in Peana butter cups.

Shawn

As we're seeing you can't say you have to buy this to enter. But if you buy it you you could win and like okay that like entices I guess people to buy it because they don't want to go to the website and just fill out whatever form. You have to fill out to be entered into the sweepstakes separately. So so. I see what you're saying in that like yes, if now Reess has to spend $10000000 to collect all of these and recall all of them and then another 5000000 to reprint everything and put it back out there now they have to sell at least 15000000 in in reese's just to break even on the competition like on the sweep stakes let alone the money they're giving away in the sweeps. Theys.

Ethan

Luckily for them Halloween is right around the corner and if there's any time to sell an extra 15000000 reesees this is the season for it.

Shawn

Asks it's now I might buy 15000000 and reesees in this month just myself so you never know I might a win win. Um, so okay.

Ethan

And you know what you might win $25000 by buying $15000000 in Reeses which I think is a win win it.

Shawn

I am listening to this podcast I'm all right through through the mind ready I'm driving my car you know and I'm like listening to Sean and Ethan talking about law stuff. This is like I've been binging this show so this is like my Twelfth episode in a row because I just love these guys so much and I hear this episode and I slam on my brakes. There are. Cars behind me slam on theirs a woman crossing the street is hit flies into the air and I go oh my god we're running a sweep stakes and I need to clear this with the lawyer I got to call this Ethan Guy how do people get in touch with you and how can they find.

Ethan

Um, forget the.

Ethan

You could visit? Yes, just visit the social media law firm.com or go on social media search for the social media law firm shoot us a Dm happy to field your questions and make sure.

Shawn

You online.

Ethan

You are not running a potentially illegal giveaway like our friends at Reese's

Shawn

That's right? And if you like the show and want to listen to more shows you can help us by rating and reviewing it on wherever you listen to podcasts that jacks the show up. Into the algorithm and then other people see the show and then they'll listen and hopefully they'll also cause car accidents by slamming on their brakes when they have ah a brilliant idea or a sudden remembrance that they need to hire an attorney and we'll be back with another episode of the social media law cast in the future. Wherever. Your podcasts are sold by Ethan.

Ethan

See Sean.