Affiliate Marketing Laws: Brands Are Responsible For Affiliates

affiliate marketing laws: brand liability
Affiliate Marketing Laws: What Are The FTC Rules Regarding Affiliate Liability?

Brands Are Responsible For Affiliate Actions

The Federal Trade Commission has made its position crystal clear: Brands and marketers are responsible for their affiliates’ actions. Full stop. No excuses.

The FTC’s stance raises a fundamental online marketing legal question: How are businesses supposed to closely monitor every single one of their affiliates — especially brands with thousands of them?

FTC Recommendations On How To Monitor Affiliate Marketing Network

Luckily, commissioners aren’t regulatory robots lacking all common sense. They do understand that businesses can’t babysit affiliates on a daily basis. In the FTC’s words:

It’s unrealistic to expect you to be aware of every single statement made by a member of your network. But it’s up to you to make a reasonable effort to know what participants in your network are saying.

To further guide brands, the nation’s consumer watchdog agency published an outline of appropriate affiliate monitoring procedures. Here it is:

  1. Given an advertiser’s responsibility for substantiating objective product claims, explain to members of your network what they can (and can’t) say about the products – for example, a list of the health claims they can make for your products;
  2. Instruct members of the network on their responsibilities for disclosing their connections to you;
  3. Periodically search for what your people are saying; and
  4. Follow up if you find questionable practices.

Now, in plain English.

When you hire third-party affiliates, promoters and endorsers:

  • Make sure affiliates are aware of the latest FTC regulations before bringing them aboard.
  • Make affiliates sign contracts agreeing to adhere to FTC and brand guidelines. (For the best protection, get an affiliate lawyer to draft a contract specific to your business.)
  • Regularly audit the websites and digital promotional efforts of your affiliates. Be sure to make a report of your findings in the event you must prove to the FTC that you monitored affiliate activity.
  • If you see content that doesn’t adhere to FTC marketing regulations, or in some way flouts the Lanham Act or Section 5 of the FTC Act, contact the affiliate about the issue. Document everything, including their responses. One day, you may need these records to prove you had an effective and ongoing affiliate monitoring system in place.

Affiliate Marketing Laws: A Starter Guide

Word to the wise: You don’t want the FTC sniffing around your operation. The investigation process can be a headache – not to mention the negative effect it could have on cash flow and sales.

Below are some links to information, tips and legal guidance concerning the FTC’s online marketing rules and regulations.

What Would You Do If The FTC Called?

Do you have a plan in place if the Federal Trade Commission comes knocking? Are you positive you’re following all the appropriate online marketing guidelines? Even the international ones? Do you have the budget to satisfy a multimillion-dollar FTC fine?

An online marketing audit will probably cost a few of hundred dollars. Get one before you end up on the FTC’s radar.