At Traverse Internet Law, we have seen a gradual, and now more pronounced, shift towards creating liability on the advertiser when an affiliate acts up and breaks the law. There has always been liability if the affiliate marketer is acting as an agent. But that is hard to prove. In the CANSPAM act an affiliate's misconduct can be imputed through to the business for whom he is marketing if the business "consciously avoided" acquiring knowledge of the spammer's misconduct. Now with the new FTC Guidelines coming into effect December 1 the Federal Trade Commission expects businesses (advertisers) using third parties (affiliates or publishers) to "monitor" blogger compliance with new advertising disclosure laws...or else.
We have been recommending for years a three pronged approach to managing the risk that arises with third party marketer misconduct:
1) Conduct Due Diligence on the affiliate in advance of acceptance.
2) Establish clear guidelines and performance standards in your affiliate contract.
3) Implement a compliance/audit program to assure compliance.
That's really what the FTC is talking about when it uses the term "monitor".
Be careful out there.
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