Affiliate Program Managers, FTC Endorsement Compliance and Merchant Affiliate Programs

This subject is a not-so-oldie, but goodie. A couple of years ago there was a huge firestorm of activity and buzz within the affiliate industry about renewed FTC guidelines regarding compliance for disclosing endorsements. In a nutshell, the FTC stated that anyone who endorsed a product/service through media (be in TV, radio, print, or online), and received some kind of compensation for that endorsement should disclose the relationship the endorser has with the product seller (or merchant).

This had massive implications for the affiliate industry. Affiliate links are considered compensation. An endorsement could include any kind of review of a product, or simply saying that "you" (the voice on the site) thinks it's a great product or deal.

Now, the onus is on the affiliate / publisher to put a disclosure somewhere visible to the reader that there is a relationship between the publisher and the merchant whose product is being discussed or endorsed. The disclosure need not be some complicated legal language, something as simple as, "hey this is an affiliate link." The FTC does take special care to state the disclosure shouldn't be buried in a separate About page or a Legal page:

"As for where to place a disclosure, the guiding principle is that it has to be clear and conspicuous. Putting disclosures in obscure places - for example, buried on an ABOUT US or GENERAL INFO page, behind a poorly labeled hyperlink or in a terms of service agreement - isn't good enough. The average person who visits your site must be able to notice your disclosure, read it and understand it. http://business.ftc.gov/documents/bus71-ftcs-revised-endorsement-guideswhat-people-are-asking/"

Now even though the onus is on the affiliate to disclose, the FTC has also stated they most likely won't go after the publisher or blogger if the guidelines are found to be in violation. They will rather go after the merchant whose products are being endorsed or advertised. This is of critical importance to merchants with affiliate programs to understand.

"We're not monitoring bloggers and we have no plans to. If concerns about possible violations of the FTC Act come to our attention, we'll evaluate them case by case. If law enforcement becomes necessary, our focus will be advertisers, not endorsers - just as it's always been."

We can even see recent cases here the FTC went after merchants over affiliate reviews: Company Settles with FTC for $250,000 Over Misleading Online Reviews

All of this is just a way to stress my point, that if you have started an affiliate program, and feel you might be in the deep end of the pool, consider getting some help from an outsourced affiliate program management team. We have the knowledge, and the resources to monitor what your affiliates are doing, and to make sure that any affiliate with review type of sites are staying in compliance with these FTC Endorsement Guidelines.