However, like many Internet-based businesses, online sweepstakes need to avoid the wrath of privacy advocates. To stay on their good side, practices such as selling personal information to third parties or sending unsolicited e-mail to customers are becoming taboo. The lawsuits allege that mailings from the sweepstakes companies have given consumers the impression that buying a product, such as a magazine subscription, would increase their chances of winning multimillion dollar prizes. Indeed, Florida one of the more aggressive states in prosecuting traditional sweepstakes companies recently dropped an inquiry into online sweepstakes. A sweepstakes, by definition, must be free to enter, and the state initially was looking at whether the money people paid for their Internet Service Provider accounts qualified as a cost to enter.
Participants trade personal information for the chance to win cash and prizes.
Little chance, then, that online sweepstakes will generate stories of elderly people waiting for the prize patrol amid a garage full of yellowing magazines. Initially, everyone was doing promotions as a way to sell things and drive traffic to a revenue site, because they used the same business model as the traditional direct mail-based sweepstakes. As a result, online sweepstakes companies have to walk a fine line to reassure their customers the data will be kept private. We don t sell the consumer data. We ask for permission every time they enter to win a promotion.