There are quite a lot of issues and questions regarding affiliate marketing. Its legality, authenticity, and etc all over the internet.
Disclaimer: While I’m not an attorney nor an expert in the law field, I can only share my own view of what I think about the topic: if affiliate marketing is legal or not. I’m just an affiliate myself. So, consult your legal counsel or appropriate body to educate you more on this if you’d wish to know more.
However still, I will address the main question that brought you here.
Affiliate marketing is an innovative and effective way for businesses to attract customers and generate sales, It can consolidate already-existing customer relationships and nurture new ones.
Even so, it comes with risks for both the affiliates and business owners, and hence there are critical legal issues that you need to be aware of before you begin creating your clientele base.
Is Affiliate Marketing Legal?
Affiliate marketing is legal and a legitimate way of making money online. It allows you to link to particular products and services, and in turn, you get paid for every click or purchase. Different affiliate marketing platforms are available such as the Amazon affiliate program, ClickBank, etc.
Moreover, standards and regulations have been set to govern affiliate marketing.
These legalities are required in some cases for participation, while others are just good business practices. They help you in creating clear marketing strategies that will, in turn, help you get customer loyalty and set you apart from those people who flout the law.
Who Regulates Affiliate Marketing?
Typically, affiliate marketing is regulated by concerned government agencies by enacting laws and regulations.
It is also done by trade regulatory organizations like the FTC (Federal Trade Commission) in the US. Although these rules accord protection to the rights of the affiliate marketers and merchants, they are more emphasized and stricter about safeguarding the rights of the consumers.
According to an interview question on MarketingLand post about compliance in the affiliate marketing industry:
Who is responsible for ensuring that an affiliate program is compliant?
The response was that advertisers are responsible for what affiliates say about their products online.
And FTC already says that as long as there is a material connection, advertisers are liable for what publishers are saying or not saying about their products.
Furthermore, advertisers need to make a reasonable effort to monitor what publishers are saying about their brands. They also state advertisers should instruct publishers to disclose their material connection to them.
Affiliate Marketing Legal Issues
Legal matters that surround affiliate marketing include:
#1: Disclaimers for Affiliate Marketing
A disclaimer discloses your use of affiliate links to your clients. It is a statement simply indicating that you will make money when your web visitor clicks or make a purchase from a link you have shared.
The affiliate disclaimer should be clear, conspicuous, and close to the links themselves.
Legal issues cannot be discussed about online marketing without mentioning privacy.
Affiliates should understand fair information practice principles. The privacy rules can vary depending on products and audiences.
But typically, its key components should notify the customers about your privacy policies and offer them options to be included or not. Furthermore, offer data security and ensure you have a plan of what you can do if the information is breached.
There is a widely shared myth that everything on the web is free.
Even so, copyright (original work of authorship) applies to images and content on the internet. You cannot pick anything online and use it in your promotions since you will be infringing someone else’s copyrighted work.
Also, if you are using an original marketing language, you should consider copyrighting that text.
You should protect your brand or logo when affiliate marketing.
If you register a trademark, you get the exclusive right to use specific words, design, name, or logo in connection with particular services or goods.
So, before registering yours, ensure that you check not to infringe on other people’s trademarks or your logo isn’t too similar to theirs.
Affiliate Marketing Agreements and Compliance
CAN-SPAM Act compliance
Email is one of the media used in affiliate marketing. It requires you to observe the CAN-SPAM act that regulates commercial electronic mails. It ensures that content or its source isn’t misleading. It also allows the recipients the right to decline future communication.
When dealing with marketing that involves children, you should comply with the Children’s Online Privacy Protection Act. It requires parental consent when collecting, disclosing or using personal information from children.
Affiliate Marketing Contracts
Affiliate marketing contracts are crucial in stipulating what the marketer should do as well as the remunerations offered.
The agreements should indicate the term and its cancellation, restrictive covenants, indemnification clauses in the event that a third party makes a claim.
Governing bodies, including the FTC, requires marketing messages not to unfairly affect consumers’ decisions or purchasing behavior. You shouldn’t omit relevant information that your visitors would be interested in.
Affiliate Marketing Requirements and Best Practices
Being abreast of the best affiliate marketing strategies and practices will ensure that you keep risks to a minimum.
Terms and Conditions for Affiliate Marketing
Terms and conditions are not legally required for affiliate marketing, but they are highly recommended.
The terms and conditions page outlines your relationship with your users and the content on the site. It also eliminates the risk of misunderstandings and uncertainty.
That’s because it defines your service, lists prohibited conduct, guarantees, and sets forth terms of the agreement.
There has been a demand for more user control over behavioral tracking. That can impact the affiliate industry significantly as cookies can be affected (affiliate is cookie-based).
While this is a voluntary process, browsers are implementing the application and are allowing consumers to choose “do not track.”
Final Thoughts – Be Wary, Be Safe
Knowledge of the legal issues surrounding affiliate marketing is your best defense against risks and violations.
Besides, operating an affiliate marketing business means that you should comply with the standards set out the governing authorities. This will not only ensure you remain on the right side of the law, but your transparency and honesty will earn you more with your customers.
Ready to start your own affiliate marketing business seriously?
Check out the below resources:
- How to promote ClickFunnels as an affiliate
- How to promote BuilderAll and make money
- Free Training on Building Authority sites that makes money
- Free training on how to quit your 9-5 with affiliate marketing