ITALIAN RULES FOR PRIZE COMPETITIONS

ITALIAN RULES FOR PRIZE COMPETITIONS

A prize competition is an initiative, which can have commercial purposes, to promote in Italy and, information on products, services, companies, brands or trademarks or sale of goods or service, by promising prizes.

The prizes can consist of material goods (including real estate), services, price discounts. Prizes cannot consist of sums of money. In prize competitions the prizes are assigned on the basis chance by a device or by machine; on the basis of the ability of competitors to make judgments or predictions related to sporting literary or cultural events, or answer questions or carry out certain tasks; or on the basis of the  ability of competitors to comply first with the conditions laid down by the rules of the event.

The prizes are delivered within six months from the identification of the winners.

Participation to the prize competition must be free, except for ordinary postage or phone or text message that might be necessary to register as a participant.

Promoters
Prize competitions can organized exclusively by manufacturers or commercial suppliers or distributors of goods or services in order to promote their goods or services.

Prize competitions can be organized in Italy by foreign companies having no permanent establishment in Italy so long as these companies have a tax representative resident in Italy.

A prize competition can be organized jointly by different companies with each company promoting their own goods or services through the same initiative.

Fulfillments
At least 15 days prior to the opening date of the competition the promoter must submit to the Ministry of Economic Development a form attaching the following documents:

  1. Competition Rules:
    These must be finalized prior to the opening of the competition, must specify promoters, duration, geographical area, mode of Conduct, nature and  approximate value of prizes, terms of delivery, data of the non-profit organizations to which the prizes not awarded will be donated. Any amendment of the Rules must be communicated to the Ministry
  2. Original document of a security that guarantees  the promised prizes:

The security shall be for a value of 100% of the total value of the prize pool. The beneficiary of the security, that must be in force until one year after the conclusion of the competition, is the Ministry of Economic Development.

The security is released after 180 days after the conclusion of the competition, when the prizes have been awarded and a final report has been sent to the  Ministry. In case of violation of the Rules in the prize award, the Ministry can withhold all or part of the security.

Specific legal rules:
There are two types of initiatives that are considered prize competition:

  • prize competitions, in which the allocation of prizes depends on chance, from any device, by the ability of competitors;
  • prize competitions where the purchase or sale of certain products or services is a condition for the award of a prize. These can have a maximum duration of 5 years from the opening date, including the procedure to identify the winners and the procedure to apply for the prize.

Exclusions (Art. 6)
The following cannot be considered prize competitions:

  • contests organized exclusively for the production of literary, artistic or scientific work, and the submission of commercial or industrial projects or studies
  • demonstrations organized by television broadcasters if the prizes are awarded to the audience in the studio;
  • events in which the prizes are made up of objects of  minimum value such as small gadgets like pencils, flags, calendars or similar objects and their distribution is not conditional on the nature or extent of the purchase;
  • events where prizes are intended for organizations or institutions that have mainly a social and charitable purpose (schools, hospitals, etc.).

Sanctions

Violation

  • holding unauthorized competitions
  • continuing the competition when it is barred
  • holding prize competitions without submitting information or without submitting the rules or documents showing that security has been paid

Sanction

  • from one to three times the amount of the VAT calculated on prize value;
  • Publication, at the promoter’s expense, on the media indicated by the Ministry, of information on holding the unauthorized competition
  • double the above sanction
  • from € 2.065,83 to € 10.329,14 

Niccolò Lasorsa Borgomaneri
For any further information please contact me at nlasorsa@marsaglialex.it