The big news this weeks seems to be the recent federal court ruling stating that advertisers should be held accountable for any deceptive or otherwise illegal acts and practices that are preformed by affiliate marketers. The court then ordered the advertiser to payout the entire $11.9 million in payments it received.
The court ruled that the advertiser violated Section 5 of the Federal Trade Commission Act (FTC Act) as a matter of law because its affiliate marketers used “fake news sites” to promote products sold online. They also stated that ‘no reasonable jury could deny’ that the advertiser participated in and had the authority to control the affiliate marketers’ conduct. Subsequently denying the argument that they were entitled to immunity under section 230 of the Communications Decency Act.
The details of the case were that LeanSpa, LLC, NutraSlim and NutraSlim, UK Ltd sold weight loss and colon cleanse products, marketing these products via their own websites but also hiring LeadClick to promote the products. For each product that was sold through the efforts of LeadClick, they would be paid an affiliate commission of $35-$45.
The problem arose when some of the affiliates that were working for LeadClick were using fake news sites to build credibility. They would list unjustified claims, analysis and statements from “experts.” None of this of course was legitimate.
According to Performance Insider, ”
The FTC as well as the state of Connecticut brought a suit against LeanSpa, LeanClick and some individual defendants. LeanSpa and the individual defendants entered into stipulated orders for permanent injunctions and money judgments. The FTC and Connecticut went after LeadClick for summary judgments.”
This case is obviously a huge bounding box for anyone that uses any type of affiliate marketing. How do you think it will affect your business?