Premiums and representations law checks before launching campaigns in Japan

Hello, this is Legal Agent.

Startups run marketing campaigns constantly: a sweepstake for following and reposting, a gift card for buyers, points for referrals, a free trial, a limited-time discount. These drive growth, but legal review tends to reach campaigns last, often only once the landing page and social posts are nearly final. That can be too late, since the answer under the Act against Unjustifiable Premiums and Misleading Representations depends on the campaign's mechanics, who receives what benefit under what condition, not the wording alone.

Start by asking whether it is a premium or a discount

The first question is whether what is being offered counts as a premium (景品類) or is closer to a discount or an ordinary transaction term. A premium under the Act is an item, money or other economic benefit provided incidental to a transaction as a means of attracting customers, a definition broad enough to cover gift certificates, points and digital items. Not every discount or perk counts as a premium, though; distinguishing a price cut or a feature of the product itself from a premium is the real question, and neither "we're giving the user something, so it must be a premium" nor "it's just points, so it can't be" is a safe shortcut. What matters is the campaign's conditions, its connection to the transaction, the nature of the benefit, and how inviting it looks to the user.

Open sweepstakes versus transaction-linked ones

A common question for social media campaigns is whether they count as an open sweepstake or one tied to a transaction. A draw open to anyone, without requiring a purchase or an application, can be treated as an open sweepstake, and the specific cap that used to apply to open sweepstakes has been removed. Where entry is limited to buyers, store visitors or people who attended a sales meeting, however, the premium rules can apply. The line gets blurry in practice: a post that says "enter by following and reposting" carries no purchase condition on its face, but if the post or landing page as a whole strongly assumes purchase of a specific product, or winners are effectively drawn from buyers only, the transaction link needs a closer look. Diagramming the entry conditions at the design stage, showing exactly what action earns the benefit, makes it easier to classify correctly.

General sweepstakes, joint sweepstakes and total premiums

The cap depends on how the premium is distributed. A general sweepstake decides winners or amounts by chance or competition (a draw, lottery or quiz); the guideline maximum is 20 times the transaction value where that value is under 5,000 yen, or 100,000 yen where it is 5,000 yen or more, with total premium value capped at 2% of expected sales. A joint sweepstake, run jointly by businesses in a shopping district or region, has a higher cap: 300,000 yen maximum per premium and 3% of the total expected transaction value. A total premium (総付景品) goes to everyone meeting a condition rather than by chance, such as every visitor or every buyer; the guideline cap there is 200 yen where the transaction value is under 1,000 yen, or 20% of the transaction value where it is 1,000 yen or more. This classification can feel unintuitive to a marketing team, but it decides the cap: whether it is a draw or goes to everyone, whether purchase is required, and whether it is a joint or single-company promotion all need settling first.

The trap in SaaS and B2B campaigns

B2B campaigns need the same care: a gift card for requesting materials, a digital gift for attending a sales meeting, cashback for adopting a product. Where the counterparty is a business, how the Act's "general consumer" concept applies can shift, but a gift to a sole proprietor or an individual staff member can still look close to a consumer-facing arrangement in substance, and also raises the counterparty company's own internal policy and conflict-of-interest concerns. A SaaS company offering a gift for taking a sales meeting should check the counterparty's internal approval and tax treatment alongside the premium rules.

Stealth marketing is the advertiser's problem

Since October 1, 2023, stealth marketing has been regulated as an unfair representation under the Act, and the party regulated is the business supplying the product or service, so a company that asked an influencer to promote it can still be the one at risk if consumers cannot tell the post is an ad. Startups often ask a founder's acquaintance, an investor or a contractor to post in early marketing, and whether that counts is not only about whether money changed hands; free products and any ongoing relationship matter too. How prominently to mark a post "PR" or "Ad" depends on the platform, since X, Instagram and TikTok present posts differently, so preparing actual sample posts works better than a contract clause simply requiring "appropriate disclosure."

Advertising claims are a separate question from the premium cap

Beyond the premium cap, the advertising language itself needs checking: claims such as "cheapest in the industry," "No. 1 in satisfaction," "half price today only" or "proven results" need review as potential misleading representations about quality or price. A No. 1 or comparative claim in particular needs the survey method, subjects and comparison basis checked, since presenting a favourable but cherry-picked survey prominently can itself be a problem under the Act. Where something is advertised as "free," what exactly is free and when it turns paid need to be clear, and for a subscription service, the campaign messaging, the final confirmation screen and the terms of service all need to say the same thing.

Campaign rules alone are not enough

Legal often drafts campaign rules covering entry conditions, the entry period, the prize and a contact point, which matters, but it is not enough by itself. The real risk lives in the social post, the landing page, the application form and the internal tracking sheet, not only the rules document, and a gap between them, such as rules describing a draw while sales quietly prioritises certain customers, or a landing page promising a gift to everyone while the rules say it is a draw, causes trouble once the campaign runs.

A practical checklist

• does entry require a purchase, application, store visit, materials request or sales meeting?
• is the benefit closer to a discount, an ordinary transaction term, or a premium?
• is it an open sweepstake, a general sweepstake, a total premium or a joint sweepstake?
• how are the transaction value and the premium value calculated?
• can expected sales and total premium value actually be tracked?
• is advertising disclosure clear across social posts, review requests and influencer campaigns?
• is there supporting evidence for any No. 1, comparative or results claim?
• are free, discount, auto-renewal and cancellation terms displayed clearly?
• do the campaign rules, landing page, posts, entry screen and winner notice all agree?
• is the purpose, recipient and scope of any personal data collected explained?

This checklist works best applied at the planning stage, not handed to legal at the end, since exceeding the premium cap can mean redesigning the campaign itself, not just fixing the wording.

Legal outsourcing that reaches marketing's decisions

LegalAgent's legal outsourcing gets involved from the design stage of a marketing campaign rather than reviewing only the ad copy and campaign rules: who the campaign targets, what condition triggers the benefit, which premium category it falls into, and how stealth marketing rules are addressed. A company with in-house legal sitting in marketing meetings checks this naturally, but many startups run campaigns without dedicated legal at all, so having outside counsel step in close to an internal legal team, without slowing things down too much, to catch a risky design early matters.

Campaigns are an important growth lever, which is exactly why legal should help design them from the planning stage rather than arrive at the end as a brake.