Who is responsible for regulating affiliate marketing? That’s actually a very common question for beginning affiliate marketers.
Affiliate marketing as an industry isn’t regulated by any one party per se. The oversight varies from country to country. But it is legal to have an affiliate marketing business.
So if you reside or do business in the United States, then the regulating body around affiliate marketing would be the FTC.
The Federal Trade Commission is responsible for regulating a ton of industries in the US, but globally there’s no single entity that regulates affiliate marketing.
When running your business in the United States, you must comply with federal and local state law.
If you are earning commissions, then you have to pay taxes on that income just like any other business. The great thing is that there is no limit to your earning potential.
Just keep in mind the tax codes for your particular country. You don’t want to mess around with not paying your taxes and finding yourself in trouble.
So let's move onto the different entities involved in affiliate marketing.
Who’s regulating affiliate marketers?
Affiliate Marketers, also known as Influencers are the ones who actually do the work by influencing prospects and generating traffic, which results in sales.
Affiliate marketers are the “Online Marketing Specialists”, and there are different specialists that consult with government organizations to create policies around the online marketing as a whole, and this also covers affiliate marketing.
In order to know who the governing authority is that is monitoring affiliate marketers in your specific location, you can do a simple Google search on the internet.
Have a look at terms associated with phrases such as “affiliate marketing laws, digital marketing laws and internet marketing laws” in your city, state, and country.
Regulators are always looking to make sure affiliate marketers are disclosing affiliate links, being honest in their advertising, and not representing themselves as the company they are promoting (that is the ultimate no-no).
Who’s regulating affiliate marketing vendors?
Let’s take a look at who’s responsible for regulating the vendors of affiliate marketing. Vendors are the businesses that partner with affiliate marketers to assist them in their marketing efforts.
Some examples of vendors are Clickbank, Amazon, and Legendary Marketer. These are companies that do business internationally and are very strict on following FTC guidelines.
These businesses have a budget dedicated to paying individuals to promote their products and services. The regulating body in the United States would be the FTC or Federal Trade Commission.
Some of these companies are so strict about governing regulations that they proactively ban affiliate marketers from certain countries.
If you want to take things a step further to gain more insight on a company's habits, you can have a look at the BBB or Better Business Bureau.
Keep in mind that a lot of information you will find on the BBB website is user submitted and has the potential of being biased.
Be sure to do your research so you don't fall prey to misinformation.
The Federal Trade Commission
Similar to traditional businesses, the FTC has guidelines in place for affiliate marketers. These guidelines are the law of the land.
Unfortunately, most affiliate marketers are unaware that they act in violation of FTC guidelines. Which is the reason why so many social media accounts get shut down and ads get disapproved.
The most important and most commonly violated guideline is affiliates and/or influencers not making it clear that they are in fact an affiliate and are getting paid a commission.
Consumers have the right to know this, and this is why it is required that affiliate marketers place a disclaimer on their websites, letting visitors know that they are endorsing someone else’s products and may get paid for doing it.
Now that you understand who regulates affiliate marketing, there are a couple more things that I want to stress so you stay out of trouble.
By all means, you should avoid deceptive marketing practices, such as making false promises, not disclosing earnings and making false income claims.
Keep yourself in the clear by following the 4P’s:
- Placement (Put disclosures close to the claim they qualify.)
- Proximity (Don’t make users scroll or zoom to see disclosure)
- Prominence (Make it stand out on the page.)
- Presentation Order (Make it “unavoidable” that consumers see disclosure before they can proceed.)
With that being said, be sure to follow the expectations of the FTC, and make sure that you also comply with the expectations of the company that you are representing.
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Mike Garvey Jr
Founder of BrandTheBoss.com
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