Illegal? How is it different from Verizon putting out an RFP saying "We have $250,000 to spend on advertising in the social media space, show me what you've got". It's the same thing but on a smaller level. The Wikipedia page describes it accurately: http://en.wikipedia.org/wiki/Request_for_Proposal
Bad for business? I have to call BS on that too. It's only bad for those catering to < $500 price point. If you can't handle pricing pressure on the bottom end, don't compete on price.
Thanks for the reply. However, I fail to see how you could have read the article, or even your own link to Wikipedia, before posting and submitting a reply.
This is not a request for proposal, by the definition on the page you linked to. This is a request for a finished artwork, thus a contest, and thus subject to laws of 50 states as well as international laws, as the article explains.
The only "contest" that is regulated by law is legally called a "Sweepstake". A sweepstake is quite clearly defined as "free entries into drawings of chance". http://en.wikipedia.org/wiki/Sweepstakes
Comparing a design contest to a sweepstake is incorrect. They are not the same thing.
And links to sites with a clear, stated, and extreme bias doesn't help you convince me "design contests are bad". It only drives home the points "designers -think- design contests are bad".
Did you read the article? As it says, there are multiple varieties of contest regulated by law, with games of chance being only one of them, and sweepstakes being only one of those. Your Wikipedia article is quite explicit about sweepstakes not involving skill, with reason.
The article agrees with you that design contests are not sweepstakes -- they are another type of contest which is subject to different laws. And while the article's truth would benefit its author, that does not mean it is untrue.
It sounds in the article that the laws in this area are a mess of grey areas. There are some obvious no-nos that need to be avoided: plain gambling, fraud etc. The former is terrible difficult to really define. The latter leads to heavy bureaucracy.
In this kind of a case, I guess it's a matter of testing to see if they are enforceable. They obviously aren't being targeted for prosecution. But that doesn't mean they can't be.
This is something like asking if there are developers who will do a mockup interface/database schema/class structure for your web app for free, so that you can choose the best one before the application is developed. You can probably find some people willing to work this way, but they probably won't be very experienced, as the experienced people will have figured out that it is hard to earn a living wage this way.
For logo design in particular, the initial design can be the hardest part of the process, so it doesn't make sense to give it away for free.
There is a comment from a lawyer at the end that just laughs at the whole post. There are design competitions all over the place, just not on the web. My GF regularly enters painting competitions. All the laws were set up to protect consumers from unscrupulous marketers, "Buy my cereal and maybe you will win something."
I think the key is how geographically widespread the entrants of online design contests are. Sure anyone can enter the painting competition at their local community college, but I doubt you'll have somebody across federal and state boundaries entering the same contest. This is just a really good example of the legal oversight startups often have.
Yea I agree. Technically he could be correct, but he's fighting a losing fight. These things are clearly not against the law in every country and so to try to ban them on the internet will just move it out of America to countries that do allow it.
That's how things work on the internet, just ask the online gambling operators.
Whether design contests are good or not, this argument is a sham. The real conflict is that design contests give non-designers a really cheap way to get design done. In particular they make it easy and low-risk to hire people from low-wage countries. And a lot of people claim the resulting design is just as good. So if you are a high-paid freelance designer, design contests are a threat to your business model.
I suspect there is a fine line between events where you get to win by submitting money (gambling), nothing of value (contest) and valuable work (tender).
The former two are heavily regulated to protect "passive participants" while the latter is materially different by virtue of participant being actively involved and is not nearly as regulated.
My humble opinion is based on similar line drawn between active and passive investments in securities laws - if one gets to profit by contributing funds but not valuable efforts it's a passive investment and the law is there to protect these people. If one gets to profit by contributing valuable effort then it's not a security and the law entrusts people to take care of themselves in these cases.
If so, note that they do not mention the word "contest". Also note that there are no "winning entrants", only "winning ideas" -- entrants receive nothing at all if their entries are chosen.
Along the same lines (or perhaps deeper into the legal gray area), try swoopo.com. Everyone pays to bid, and the one highest bidder walks away with the item at a pretty low price, but the "house" ends up with a lot more. Shady.
Bad for business? I have to call BS on that too. It's only bad for those catering to < $500 price point. If you can't handle pricing pressure on the bottom end, don't compete on price.