The Law for Affiliate Marketing: Prohibited Advertisements

Affiliate Marketing Worst Practices

Disclaimer: Obviously, this blog does not provide legal advice. How do you know? This is free. Legal advice you have to pay for.

Some of the largest complaints about affiliate marketing concern illegal and unethical marketing techniques. While it seems like that benefits the retailer, remember, the retailer can be held liable for the acts of the affiliate marketer. Plus, no retailer wants to be associated with crummy advertising, no matter who’s doing it.

Some practices go beyond just annoying, and may violate laws or open up liability. Adware and spam are now heavily regulated. Intellectual property issues, like copyright and trademarks, might lead to expensive court cases.

Adware and Spyware

For as long as there’s been an internet, there have been people trying to sell crap and spy on you. Adware and spyware are prevalent, and as such, they are prime targets for the Department of Justice and the FTC. Spyware faces legal issues under a number of federal laws, including the Computer Fraud and Abuse Act, the Stored Communications Act, and the Wiretap Act. There are also numerous causes of action (legal reasons to sue) for spyware. While spyware is not necessarily illegal, it runs into legal trouble all the time, especially when the company does not adequately disclose that it is uploading software and what that software does.

Consider the case of ERG Ventures. They were targeted by the FTC for uploading spyware and adware onto their customer’s computers by promising free lyrics, browser upgrades, and ring tones, plus their affiliates’ promise of free background music for blogs. This cost the small company $2 million. That’s a lot of money, especially if it’s the affiliate’s doing.


We all know spam is not only annoying, but in most cases illegal. The FTC is pretty aggressive about going after violations of CAN-SPAM. Spam is any “unsolicited commercial email.” That’s three things: (1) an email – this one’s pretty easy; (2) commercial – anything advertising or promoting a product or service; and (3) unsolicited – if they didn’t ask for it, don’t send it to them.

This is especially important when dealing with affiliate marketers. If they spam customers, the retailer can be liable. Fines can be up to $300 per email (though that’s unlikely to happen). Plus, CAN-SPAM judgments follow you even if you file for bankruptcy. If your affiliates are using email, have a talk with them. If it’s even possible they’re spamming, drop them and move on.

Any emails you send for your company should at minimum:

  1. Only be sent to those who have requested to be added to your mailing list (don’t trick them);
  2. Provide a way to unsubscribe;
  3. Put your address in the email.

There’s more you can do, but that’s a start.

Special note on Canada – Next month (July 2014), Canada’s new anti-spam legislation goes into effect. If you or your affiliates are targeting Canadian customers, you need to know about this, since the rules are pretty strict. Under this law, a customer’s agreement to receive emails happens for 24 hours after making a purchase or agreement, 24 months after signing a contract, or six months after making an inquiry into a purchase. This adds a time layer into the scheme, and requires the customer to actively pursue the retailer. Keep an eye out for this.

Intellectual Property and Keywords

Like everything else, retailers are liable if their affiliates violate a copyright or trademark. This often happens when the affiliate copies pictures from the internet onto their site, or uses a logo or slogan that they don’t own.

Copyright refers to creative stuff, like writing or images. All work is automatically copyrighted, so do not assume you can copy it because it is on the internet or does not have a © next to it. Stock photo companies are particularly litigious when it comes to unpaid for use of their photos. Trademarks are similarly automatically created, and are heavily policed by the owners.

An issue particular to affiliate marketing, is the use of trademarked keywords, like a brand name that relates to your product. This area of law is still difficult, since some courts say it’s illegal, and others say it’s not. So using trademarks as keywords is done at your own risk. But think, is your “Better than an iPad!” ad so good that it warrants fighting Apple in court?

If you do want to take the risk, then try to be safe.

  1. Never use the trademark in the text of your ads;
  2. Label your ads as advertisements; and
  3. Identify yourself or the retailer.

Next – Privacy Policies >>