Company on the FTC Hook for Affiliates...your thoughts?

by LB
3 replies
So this company had affiliates who were posting affiliate reviews without allegedly disclosing their affiliate status and it cost the company $250,000 in fines from the FTC.

FTC Settles With DVD Seller Over Fake Reviews | PCWorld Business Center

Your thoughts?

I don't know the details of this case, but I would wager money that just about every affiliate program in the world has at least one affiliate that is not following FTC guidelines.

It's interesting the FTC went after the company rather than the affiliates, I imagine that's where the money was.
#affiliatesyour #company #ftc #hook #thoughts
  • Profile picture of the author kindsvater
    The FTC over the last two years has been slowly trying to make merchants responsible for the advertising of their independent contractors as if they were employees.

    I wrote a couple years ago there was a lack of legal support for this position.

    My opinion remains the same.

    The problem is the FTC has so many weapons in its arsenal to absolutely destroy a person that, as in this case, there is a quick settlement. No court I am aware of has ruled on this position by the FTC.

    If this were actually the law affiliate marketing would be dead. But it's not the law. The general rule is that one is not responsible for the actions of independent contractors.

    That doesn't mean one gets to sit on their hands if they become aware of a problem.

    But Amazon.com does not need to affirmatively monitor 10 million affiliates and 50 million ever changing web pages and 200 million ever changing representations by affiliates.

    Interestingly, it was claimed the merchant in this case represented that its affiliates needed to comply with FTC rules. That was a big mistake.

    Once you undertake a duty, even if not legally required, then you need to follow through with it.

    .
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  • Profile picture of the author enterpryzman
    Based on what the article says and the revenue created, 250-k sounds cheap and not that bad an exchange. I understand it was "indirectly caused " by them however, my business is heavily governed by the FTC and my employee's ( agents ) represent me and I am required to train them.

    I would guess they upheld that affiliates are acting as agents at least in part. Additionally, they are causing sales of the company product to be made. This is exactly why you see companies provide very specific ads that can be used and all ads affiliates want to use must be approved first.

    You do have a duty to police those selling your products, like it or not.

    Enterpryzman
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