Affiliate marketing is an industry that is not regulated by anybody per se, as this varies from one country to another.
So if you are wondering who regulates affiliate marketing, the concrete answer is the FTC. But this is a little vague, because the same government body, the Federal Trade Commission, regulates a myriad of industries.
The real answer here, from a global perspective, is that no single entity regulates affiliate marketing.
It is your government that does this. If you run your business in the US, then you must comply with US federal and state laws.
The reason behind this is that it operates under the same legal provisions that regulate businesses.
You earn your commissions, and then you pay your taxes. Pretty much, there is no real limit as far as your potential earnings are concerned.
Just take note that each country has different tax laws, and you need to abide by these laws if you do not want to get into trouble.
Here, we will take a look at who regulates affiliate marketing from different perspectives.
The Affiliate Group
When you register as an affiliate marketer, the person responsible for the product you sold is the vendor.
As such, there are specific rules that you need to abide by, considering that if you make false promises and defrauded customers, the vendors will have legal liabilities.
In this case, the regulator is the affiliate group. For more concrete examples, you can take Clickbank, Amazon, and Wealthy Affiliates as examples.
These are huge international companies which vouch for the products they sell.
As an affiliate marketer, you are expected to comply with their provisions of credibility and integrity.
They have specific rules as to what you can promise to your customers. If you lie just to get a sale, and they find out, you will be blacklisted from these companies.
There are also other rules bordering on the technical, such as violations of cookie policies, using black hat SEO, and more.
The Federal Trade Commission
The FTC has guidelines for influencers. These guidelines are the same as what big companies and advertisers use. These guidelines are the law.
Sadly, only 11% of influencers are aware that they are within the jurisdiction of the FTC. This is why many YouTube channels are shut down every day.
Even if you do not work with influencers in social media, you are liable to follow the FTC guidelines for as long as you are advertising online.
It does not matter to the FTC if you are the endorser, influencer, or the affiliate. All these roles must follow the rules.
The most important one that is commonly violated is that the affiliate does not make it clear that he is an affiliate.
Consumers have the right to know this, and this is why many affiliate marketers add a disclaimer to their websites, letting the reader know that he is merely endorsing someone else’s products.
Now that you know who regulates affiliate marketing, there are a few more things you need to understand, so you do not get into trouble. Keep in mind that.
Anything that constitutes fraud is a violation of FTC rules. You should also avoid practicing deceptive advertising, making false promises, and unfair commerce.
And to keep yourself safe, follow the 4Ps of affiliate marketing.
- Prominence – there must be a disclosure big enough for your site visitors to read. The disclosure must say that you are an affiliate. For videos, you can talk about it, and make sure it is comprehensible.
- Presentation – the disclosure must be worded in a way that is easy to understand—that you do not manufacture the product.
- Placement – you should place your disclosure in a spot on your video or webpage that is easy to see.], not hidden somewhere else.
- Proximity – the claim of your disclosure must be the real thing. If you are earning a profit, declare it.
So, now that you know all these, you have to be guided accordingly. Follow the expectations of the FTC, and make sure that you also comply with the expectations of the affiliate group.