Penalties for non-compliance
What are the penalties for non-compliance?
National authorities can prohibit the prize competition and reinforce the prohibition order by imposing a penalty payment for non-compliance. The amount of the penalty depends on the nature and scope of the obligation imposed, the paying capacity of the addressee, and other issues affecting the matter. There are no maximum sanctions as such.
In 2000 the Market Court held the defendant liable to pay a penalty payment of €50,000 (approx. US$56,000) for non-compliance with the prohibition order of the Consumer Ombudsman. Moreover, the Market Court reinstated the prohibition order and imposed a penalty payment of €100,000 (approx. US$112,000) in a case of further non-compliance. The defendant had arranged a prize promotion. The Market Court considered that the prize promotion itself was the main subject of marketing instead of the marketed service. This amounted to a violation of the Consumer Protection Act.
Non-compliance with tax legislation may result in tax consequences and criminal liability.
In cases where a prize promotion amounts to a lottery or gambling (eg participation requires payment), specific criminal sanctions apply. Penalties vary between fines and imprisonment for up to two years.
Finally, there is the possibility that the personal data processing aspects of the promotion could breach GDPR, which has maximum fines of up to the higher of:
- €20 million (approx. US$22.4m); or
- 4% of the promoter’s worldwide annual revenue.