Legal Lessons for Affiliates from Affiliate Summit West 2013

Kelly Clay

As an affiliate, knowing what’s legal – and illegal – can be the difference between running a successful business or ending up broke. Not only should affiliates know the rules related to each of the affiliate programs they join, they should understand the law when it comes to advertising and copyright issues. This week at Affiliate Summit West, several lawyers were on hand to discuss what kinds of legal issues affiliates may face – and how to avoid them.

One of the biggest laws that affiliates break is regarding deceptive advertising. The FTC has clear guidelines on what makes an ad deceptive, explaining that an ad is deceptive if it contains a statement or omits information that:

– Is likely to mislead consumers acting reasonably under the circumstances

– And is “material” – that is important to a consumer’s decision to buy or use the product.

Essentially, this means that advertising must be truthful and non-deceptive. Advertisers must have evidence to back up their claims, and advertisements cannot be unfair.

One of the most common ways that affiliates deceive their audience is by using fake endorsements – either with celebrities who don’t actually endorse the product or with fake reviews. As Sarah de Diego, an attorney with De Diego Law said during a panel at Affiliate Summit West, “In this day in age, these celebrities have a lot of value tied into their brand and won’t hesitate to send their legal team against these types of affiliates.” Unless you are willing to actually pay a celebrity to endorse the product you are advertising, the legal ramifications of illegally using a celebrity’s image to endorse the product will likely hurt instead of help your campaign.

Similarly, Troy Meyerson, an attorney at Fraser Stryker, explained during Affiliate Summit West that affiliates should especially be aware of not infringing on any patents or trademarks. Additionally, Meyerson says affiliates should always have a privacy policy and terms of service page on their website that reflects what they do. He notes that many affiliates cut and paste these sections from other websites, but the FTC will enforce your policy, so if you say you don’t sell any data – but you actually do – “that could be a real problem” according to Meyerson.

Of course, if you’re an affiliate, it’s critical that you have contractual agreements with every merchant and network you work with. As Eric Crusius from the Centre Law Group explained during his session, contracts not only help eliminate risks as an affiliate, but establish guidelines for what you can and can not do. These also allow you to negotiate terms (such as compensation) and make sure that you, as an affiliate, can ensure that the product claims are accurate so that your legal liability is reduced.

Generally avoiding bad decisions – such as using other content or another brand’s likeness illegally – should eliminate most of the legal risks you will encounter as an affiliate. If you have doubts about what might be a bad decision, consider getting legal advice from someone who knows the industry before you face a cease and desist letter – or worse, an actual lawsuit.

Kelly Clay

In addition to writing about emerging news and trends in the performance marketing industry, she is a columnist for Forbes, covering the intersection of technology and society. She can be can also be found on Facebook, Twitter, or her personal blog... and usually with a cup of coffee in hand, too.