Are Affiliates in Danger Legally from Affiliate Networks?Written by Alex Becker
November 19, 2010 # 10:41 am # Marketing Insights # 3 Comments
Affiliates need to pay attention; your affiliate network’s actions could get you in some serious trouble. If you think that as an affiliate you can just put any advertisement up, regardless of what it’s advertising, regardless of the claims, you are seriously wrong. Affiliate Networks already have a history of throwing their affiliates under the bus when it comes to lawsuits and blaming “rogue affiliates.” If you are making money from affiliate marketing, you need to examine whether your network is going to cause you financial harm or send you to jail.
I have written about this before: the legal standard is generally that publications are not liable for the bad behavior of their advertisers. The courts have been pretty clear about this and have ruled time and time again that the very act of publishing an advertisement does not make the publisher, for example a newspaper or website, a partner in the advertisements. The only service that the publisher is providing is the actual “space” for the advertisement to be shown.
However, for a publisher to assert this independence, the publisher must be completely separate from the advertiser regarding the claims and content of the advertising. The publisher must be only selling “space” for the advertiser, not involved with any other decisions whatsoever. Bennet G. Kelley of the Internet Law Center explained to in a brief conversation about this topic, once a publisher gets more involved “there is a potential for greater liability. The greater role one takes the greater risk they take.”
In here comes the problem for many affiliates: since they are not supplying just space but work as “partners” with the affiliate networks and the advertiser, they could be held liable for the content of those advertisements. Depending on their involvement with the advertiser, this means that there is a very real possibility that if the advertiser and the network were named in a civil or criminal action, the affiliate could also be part of that action.
“It is the difference between being passive,” says Kelley “and being an active participant in the process. Once you get involved in the decision making of what the advertisement says you open yourself up to liability.”
If you are an affiliate, you need to examine the affiliate networks that you work with. If you have been concerned in the past with who pays, you need to look at the partnership you are creating. In our industry there has been a lot of talk about compliance from the network side, networks examining their affiliates. However, as an industry, we need to make sure we are protecting our affiliates from “rogue networks.”
Here are some questions that you need to ask of the networks you work with, plus do your own research.
1) Has the affiliate network ever been the subject of a government action? This is a sure way to know if the company has some issues legally. While government action doesn’t mean the company is necessarily a bad player, affiliates need to examine why the actions took place. If they are multiple allegations over time from different entities, be very wary of the company. What is going on inside that company that makes them the target over and over again?
2) Have they been the subject of lawsuits alleging deceptive or other illegal practices?
Lawsuits against affiliate networks aren’t that common actually. Only a few affiliate networks in the last ten years have been involved with civil actions alleging illegal or deceptive practices, so if you are working with one of those companies you need to wonder what they are doing wrong. These actions usually are against companies that like to play on “both sides of the line” meaning that they want to push the boundries, depending on good attorneys to protect them. If you are named in their lawsuit along side of them, are they going to defend you, pay for your attorney? Most likley they will hang you out to dry.
3) Is the owner a convicted felon or served time in jail for anything over parking tickets?
Examine the person behind the company, is this someone you’d let your kids (if you are that old, or have any) hang out with? If they are sleeze bags that you’d be scared to let in your neighborhood during Halloween, that’s probably a good sign. Yes, this industry has several convicted felons owning affiliate networks and worse, registered sex offenders. You need toe examine a person’s ethics in regards to other people. Do you want to really trust some guy who was caught robbing old ladies of their social security money with your business?
Whatever you decide, realize that your decisions of what affiliate network you work with could affect you in the future. If that affiliate networks gets in trouble, don’t be surprised, especially if run by a scumbag, that you will find yourself also in trouble.