Do we need DTI permits to run blog contests?
I woke up with a headache today - it must be from watching Dune (2000 version) and playing Scrabble on the iPad all night. Apparently we are going on a road trip today so I need to fix myself up pronto. Then I saw an email from someone who's writing an article on Inquirer's 2bU asking my opinion on the whole DTI contest permits for bloggers chorva, so I started to update myself on the latest comments for the nth time this week.
Might as well write down my thoughts while I'm answering the writer's questions.
Two things you REALLY need to know about this issue
One, the initiative to require bloggers to get a permit before running contests is not from DTI. It's from one person only, and her name is Janette Toral. You will remember her for her push to create a National Bloggers Association a few months back. She supports the institutionalization of blogging.
As of now, DTI has no official statement about this issue. It is all coming from one person and her personal blogs. I believe she has had a dialogue with DTI about this but only her side and her cause has been heard so far.
Two, a business entity who holds a contest requires a permit. This is not up for discussion. This is already a law - it's called the Consumer Act of the Philippines. The real question is, does this law apply to bloggers and blogger contests?
Two provisions for contention
This is the definition of sales promotion according to CAP.
"Sales Promotion" means techniques intended for broad consumer participation which contain promises of gain such as prizes, in cash or in kind, as reward for the purchase of a product, security, service or winning in contest, game, tournament and other similar competitions which involve determination of winner/s and which utilize mass media or other widespread media of information. It also means techniques purely intended to increase the sales, patronage and/or goodwill of a product.
Jill of Kikay Exchange asked last night - is a blog a product? If so, does it make the blogger a business entity?
In broad terms, a product is a "thing produced by labor or effort" or the "result of an act or a process". A blog is most definitely a product according to this definition. In terms of commerce (defined by DTI as "the sale, lease, exchange, traffic or distribution of goods, commodities, productions, services or property, tangible or intangible"), a product is an article or substance that is manufactured or refined for sale. The person who sells a product is a business entity.
Obviously, I am not selling my product, which is my blog, since it can be accessed by anyone at no cost. Therefore, I am not a business entity. The consumer act should not apply to me in my capacity as a blogger running a voluntary contest to promote my blog to non-paying readers.
However, if a brand sponsors a contest on my site, the contest will definitely need a permit. That's not a problem because the brand should then take care of getting that permit.
Next point.
Art. 116. Permit to Conduct Promotion. - No person shall conduct any sales campaigns, including beauty contest, national in character, sponsored and promoted by manufacturing enterprises without first securing a permit from the concerned department at least thirty (30) calendar days prior to the commencement thereof. Unless an objection or denial is received within fifteen (15) days from filing of the application, the same shall be deemed approved and the promotion campaign or activity may be conducted: Provided, That any sales promotion campaign using medical prescriptions or any part thereof or attachment thereto for raffles or a promise of reward shall not be allowed, nor a permit be issued thereof.
I think the law is pretty clear on this. You will only need a permit if your sales campaigns or promotion is national in character. DTI assumes that blog contests are national in character because the reach of the blog extends to anyone who has internet. But what if I open my contest only to Metro Manila residents? Or Davao residents? Or Luzon residents only?
That's not a contest that is national in character. Therefore it should not need a permit.
In other words...
Unless I am missing anything (and please correct me if I do) the CAP provisions on requiring contest permits should only apply to bloggers who run contests sponsored by brands as a sales campaign initiative and national in character. Otherwise, if we're just giving away our stuff, then we should be alright. If the stuff is sponsored by a brand specifically for promoting their business, best open the contest to certain areas only or just ask the brand to process the permit for you.
What I think about blogger contests
After everything is said and done, I can simply stop running contests. To begin with, running contests is time consuming and it sometimes entails cost on my end shipping out products to the winners. I wouldn't mind these actually if I didn't observe that contests don't really achieve the results I want for this website. I would rather build my readership slowly but with true readers who like the blog of their own volition. I would also rather give out stuff to people who already support this blog, as a thank you (hence the commenter of the month gift, which isn't even a contest).
Still, I run a contest every now and then because a brand wants to give away something to my readers. There isn't any reason to say no since these brands usually take care of the shipping and even choosing who wins, and of course, readers get the chance to win something cool too. My blog simply becomes the medium between the brand and the (actual and potential) consumers.
So yes, this whole DTI thing affects me. I'm thinking of putting off two contests until this is clarified.
Ok my headache is officially worse. Catch you later.
Disclaimer: I am just a ditzy beauty blogger who does not know much about interpreting the law and should therefore not be taken seriously.
Found on the Department of Trade and Industry's FAQ page on Sales Promotions:
Are there exemptions from permit requirements?
Permits for the following sales promotion activities need not be applied for:
1. Competitions, except beauty contest conducted nationwide, which do not require the purchase, lease or payment of any consumer product or service or availment of consumer credit;
2. Parlor games, whether held live during stage shows, parties, special occasions and/or utilizing any form of mass media. Provided, that the home partner of the winner is not required to purchase or lease any consumer product, service, or avail consumer credit facility, including the sending or presentation of any proof;
3. Door prizes given to patrons of concerts, stage shows, stage plays, film shows, and similar activities;
4. Instant sales promotion campaigns;
5. In store promotions, such as, but not limited to price reduction promotions, discount sales and premium-in pack in which no advertisements are made on such sales promotion campaigns.
So yes, I hope this puts your concerns to rest. You can run any contest you want as long as there's no purchase required.
All I can say is: what a load of crap the blogging community has been through this past week!
Here are two posts you need to read on what exactly happened - that is, how one self-interested individual misled all of us into thinking we need permits to run blog contests.
From Rico: http://rico.mossesgeld.com/2011/08/how-the-dti-permit-online-scandal-progressed-july-29-2011/
From Juned: http://baratillo.net/?p=819
