Are DTI permits required for running contests or promotions—online and offline—where no purchase is necessary? That’s been a hot topic among online veterans and newcomers alike for the past few days. Why? Here’s the first part of a series of posts where I try to explain what happened.
Ad agencies, businesses, online marketers, and bloggers have operated under the assumption that a Department of Trade and Industry (DTI) permit isn’t necessary if you run a contest or promotion where no purchase is required.
Why would a DTI permit be required otherwise? It’s to protect people who spend their hard-earned money for the chance to win something. An unscrupulous contest holder may just award the contest prizes to a friend or family member. Or worse, back out of giving away the prizes as promised.
That’s why when telcos like Globe offer free minutes on top of the load their prepaid users pay for, or SM promises a kitchen showcase for shoppers who spend enough money, these promotions come attached with a DTI permit number (“per DTI-NCR permit bla bla”, for example).
On the other hand, what kind of risk do people take on when they participate in a free-to-join promo? The general stance, which I follow, is nothing. The worst case scenario, someone who doesn’t give away prizes as promised, would result in a reputation hit for the contest holder. That alone should be enough for no-purchase promos to stay on the level, especially for high-profile businesses and online personalities.
July 29, 2011
Here’s where the trouble begins: Janette Toral, based on “discussing briefing [sic] on online promotion with the [DTI]“, said that “YES, individuals, bloggers, and businesses do need a DTI Sales Promotion Permit whenever they run an online or offline sales promotion even if there is no purchase required as you are targeting consumers to participate.”
Yes, Janette did hold a “discussing briefing” with the government agency. Her dealings made one inconsistency with DTI policy clear however: The DTI-NCR website FAQ says that no-purchase promos are exempted from the DTI permit requirement.
Janette’s assertion, which to be fair was based on what she did hear from a DTI representative (more on that in succeeding entries), caused outrage among bloggers. Among the issues were the added cost and the notoriously bureaucratic permit application process. To quote the reply Bim Barbieto of Comicology (complete with profanity!):
I’m sorry but that is complete and utter BULLSHIT. Okay, so I run a comic book blog that makes about 42 pesos in three years, in the form of donations from my mother. I sometimes give away toys or comic books or tickets or whatever that I buy from my own pocket. FROM MY OWN POCKET.
I give these prizes away for fun, for people to participate in shit like superhero fantasy tournaments. You know how much money that makes me? Zilch. Then fucking DTI will tell me I need to get a fucking Mayor’s Permit for that kind of SHIT?
Another source of the outrage (at least among many local bloggers) was what Toral proposed with her assertion (now deleted): that an “idea suggested by a fellow blogger is for an association to cover us and negotiate with the government [on the behalf of bloggers] to carry out its own permit system.” That statement alone left many observers skeptical, certain that Toral was trying to revive her failed attempt to create a Philippine Bloggers’ Association.
Next entry for August 2, 2011 will be up soon, so stay tuned!