New HostGator TOS Reflect Stricter Enforcement of FTC Laws for Affiliates

21 replies
This is a sign of the times and a sign that you all need to get up to speed with the FTC guidelines for affiliate marketing.



Below is an overview of the changes made:


1: Section 5 paragraph 2 - HostGator expressly requires you to disclose that there is a "material connection" between you and HostGator any time you offer an endorsement or testimonial on our services, in accordance with the Federal Trade Commission guidance as outlined at http://business.ftc.gov/documents/bus71-ftcs-revised-endorsement-guideswhat-people-are-asking.pdf. Such disclosure should be clear and prominent, meaning close to the endorsement or testimonial.


Please review these FTC Guides (please remember these are simply guides and not legal advice, we recommend consulting legal advice on these issues) to assist you with these requirements:
http://ftc.gov/os/2009/10/091005endorsementguidesfnnotice.pdf
http://business.ftc.gov/documents/bus71-ftcs-revised-endorsement-guideswhat-people-are-asking
http://business.ftc.gov/sites/default/files/pdf/bus41-dot-com-disclosures-information-about-online-advertising.pdf


Please note: You should obtain legal advice on how to fully comply with these responsibilities in your specific situation.
#affiliates #enforcement #ftc #hostgator #laws #reflect #stricter #tos
  • Profile picture of the author Brad Gosse
    The internet is slowly phasing out of the wild wild west stage.
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  • Profile picture of the author NicholasCollins
    I was reading a bit on this earlier this year with all of the 'paid' celebs on twitter blasting out paid tweets for companies. I am glad to see these changes.
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    • Profile picture of the author Johnny Optimo
      Originally Posted by NicholasCollins View Post

      I was reading a bit on this earlier this year with all of the 'paid' celebs on twitter blasting out paid tweets for companies. I am glad to see these changes.
      but do you like the idea of disclosing every one of your affiliate links? legally it may be a gray area right now, but it kind of seems like over the past few years that's the direction the FTC has been taking.
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      • Profile picture of the author Alexa Smith
        Banned
        Originally Posted by Johnny Optimo View Post

        do you like the idea of disclosing every one of your affiliate links?
        I do, yes.

        I always have done: I think honest disclosure, appropriately worded, helps me to sell more.

        I'm not in the US and some of my sites are neither registered nor hosted in the US, so I'm not clear to what extent FTC regulations apply to me, but full FTC compliance is something I've always tried to do voluntarily.

        The way I look at it is as a potential customer. I ask myself "Would I like to know whether or not the person reviewing this or making this recommendation is being paid for it?" and my answer is "yes".

        I think if you asked 1,000 potential customers this question, at least 999 of them would say yes, wouldn't they?

        The reality is that FTC regulations gradually come to apply to everyone online anyway, I think, regardless of location, because they become part of the standard terms of service of other online businesses whose services we need: hosting companies, autoresponder companies, and so on. Personally, I think that's a good thing.

        There's no downside to "honest disclosure" if everyone does it, and it can only help our profession of "internet marketing" to enjoy a better reputation than the one we currently have, in some quarters, for trying to deceive and mislead people.

        So I'm greatly in favour of strong regulation, myself: I think that in the long run the only losers will be people who want to deceive and mislead, and the faster we can get them out of internet marketing, the better for all the rest of us, collectively, really.

        Ironically enough, the only people seriously complaining about things like this, I suspect, are the ones causing the exact problems to which these things (and their gradual enforcement) were the entirely predictable and inevitable reaction.
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        • Profile picture of the author Bill Farnham
          Originally Posted by Alexa Smith View Post

          I think if you asked 1,000 potential customers this question, at least 999 of them would say yes, wouldn't they?
          Alexa,

          Unfortunately, no.

          25% of them wouldn't understand the question even if the question was "Does the earth revolve around the sun?"

          Just a sign of the times...

          ~Bill
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      • Profile picture of the author JohnMcCabe
        Originally Posted by Johnny Optimo View Post

        but do you like the idea of disclosing every one of your affiliate links?
        Johnny, I was disclosing affiliate relationships long before the FTC decided it was time to crack down. Never had a problem with it.

        I'm not trying to hide anything. If anything, I might be trying to ride the coattails of the company I'm endorsing. Unless they know me, people have no reason to trust what I write. But they trust Amazon, for example.

        On most of my sites, I tell people on the 'about me' page that if I forget to identify an affiliate link, it's best to assume I'll make a referral fee if they buy through that link.

        Of course, I never endorse anything I'd be ashamed to admit promoting. And I don't write vapid, hypey pseudoreviews.
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        • Profile picture of the author Johnny Optimo
          Originally Posted by JohnMcCabe View Post

          Johnny, I was disclosing affiliate relationships long before the FTC decided it was time to crack down. Never had a problem with it.

          I'm not trying to hide anything. If anything, I might be trying to ride the coattails of the company I'm endorsing. Unless they know me, people have no reason to trust what I write. But they trust Amazon, for example.

          On most of my sites, I tell people on the 'about me' page that if I forget to identify an affiliate link, it's best to assume I'll make a referral fee if they buy through that link.

          Of course, I never endorse anything I'd be ashamed to admit promoting. And I don't write vapid, hypey pseudoreviews.
          The problem in my eyes is one you illustrate perfectly - what if these regulations were enforced much harder, and what if you did forget to put in that one affiliate link? Disclosing on the 'about' page doesn't constitute disclosure. What if you got shut down or slapped by the FTC for that? If you believe that the spirit of the law is always held above the letter of the law, you may think it's all good - but I guess I'm more cynical.

          That being said.. it's really all moot because the actual text of the 2009 FTC stuff doesn't even once mention 'affiliate' or 'link' (search it if you don't believe me) - it really has more to do with receiving a payment AND THEN promoting a product, not just throwing a link up. Hostgator is just going to extra mile to protect its ass.
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          • Profile picture of the author Alexa Smith
            Banned
            Originally Posted by Johnny Optimo View Post

            it's really all moot because the actual text of the 2009 FTC stuff doesn't even once mention 'affiliate' or 'link' (search it if you don't believe me)
            I did.

            In 2009 (when I discussed it with a lawyer) and again, just now.

            I found out that it isn't as you imply, at all.

            They have clear explanations on their website. Understandably, they tend to use some slightly legalistic terms like "incentivized endorsement" (which is perhaps why you don't easily find the words "affiliate link" there), but the meaning is perfectly clear, so don't fool yourself about this, Johnny.

            It's far from "moot".
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  • Profile picture of the author Rob Howard
    Brian, this new TOS only has to do with promoting hostgator as an affiliate, correct?

    Rob
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  • Profile picture of the author lastreporter
    [DELETED]
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  • Profile picture of the author yourreviewer
    Sorry, I don't understand how this is different from what the FTC insisted in late 2009. This is what everyone was suppose to do and I find it rather surprising that these companies have just started taking it seriously.
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  • Profile picture of the author Paul Myers
    Bill,
    25% of them wouldn't understand the question
    Depends on the market. Some simply wouldn't care.

    One thing that could make this interesting. People who post discount coupons here that are actually used for tracking affiliate sales. That could make spamming the board with those a lot more expensive for some people...


    Paul
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  • Profile picture of the author billnad
    Clickbank pushed this hard a couple of months ago as well and I am sure we will see a lot of companies online have to reign in their affiliates. The wild west may be here on the 'net still but there are a lot of crazy promises that no one can live up to.

    I am happy that the FTC is trying to reign in the sheisters but I always get a little nervous when faceless government agencies try to pick away at something, it can get a little heavyhanded.
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    Watch as some guy is Blogging for Cash, Me on Twitter

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  • Profile picture of the author BeenThereDoneThat
    It would also be cool if those that are reviewing WSOs would fully disclose whether or not they are affiliates as well.
    Stef
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