Much has been written about the case of Purely Creative Limited & the Office of Fair Trading, or “Purely” as it has been tagged.  There appears to have been little analysis of the potential consequences for businesses of the forthcoming decision of the European Court of Justice.

As solicitors for “Purely” and the other group companies Partner Nigel Tillott has set out some detailed thoughts in the Regulatory Section of our website. 

To give a flavour, some of the issues which the European Court will be battling with are set out below:-

• Is the effect of new Regulations to prevent organisations from running “everyone’s a winner” type promotions where there is some cost involved to the consumer. For example could this impact on the competitions and “lucky dips”  that charities might run at fund raising events?
• If an individual has won a prize in a competition are the Regulations breached if any cost whatsoever is incurred in claiming it?  For example, would sending a letter of claim or making a standard rate telephone call mean that the promotion was in breach of the Regulations?
• If  there is any cost involved in enjoying a prize would this mean a breach of the Regulations?  For example if the prize is tickets for a major pop concert or sporting event and the cost of travel to and from the event and food and refreshments are not included would that breach the Regulations?
• If it is decided that minimum costs can be incurred in connection with claiming a prize, what minimum costs are envisaged?  For example would use of standard rate post or telephone be a breach of the Regulations?

These are just a few of the issues involved and discussed in the Regulatory Section of the website.   Purely and the other companies involved maintain that the key issue is “transparency”. If consumers are clear about what they are entering, what the exact nature of the prize is – what it includes and doesn’t include – at the time of entry then there shouldn’t be a breach of the Regulations.   The OFT is seeking to interpret the Regulations in a far stricter way.  The potential consequences of the decision could be very significant indeed for all businesses, charities and fundraising institutions that run competitions or promotions.  Should these other businesses be making their voices heard?

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