Merchants are Getting Sued for their Affiliate's Actions

[Linda Buquet]

Internet Law Video below - Affiliate misconduct is, or should be, the 2nd biggest legal concern for online businesses according to John W. Dozier, Jr, a leading Internet Law Attorney. He says over half of his law firm's practice involves affiliate marketing related legal issues, so he knows what he's talking about. In the video below Mr. Dozier states "...one of the most significant liabilities for the small business is affiliate misconduct..." His law firm is seeing that at a growing rate, merchants are getting sued for the misconduct by their affiliates and we aren't just talking about affiliate spam. Dozier Internet Law has a section about affiliate marketing legal concerns. Following are just a few of the legal cases they have had that involved affiliates and merchants.

*Affiliates were spamming and our client was sued by Microsoft.
*Our client was sued for trademark infringement because an affiliate was using a competitor's trademark in a redirect page to increase Google rankings.
*Affiliates of a competing merchant site were using trademark terms of our client while pay per click marketing for competitors.
*Affiliates were losing a month's commissions by affiliate program clearinghouses for alleged technical contract violations while it appeared refunds were not being returned to merchants out of the affiliate accounts. (A trusted 3rd party network cheated?)
*Our client's affiliates were defaming competitors on chat boards and in forums in order to drive traffic to its own site.
*Our client found numerous duplicate landing pages of its homepage site content being used by affiliates selling competing products, complete with the same meta tags.
*Our client was the subject of "click attacks" emanating from affiliate marketers of a major competitor.

In this video Mr. Dozier cites Affiliate Misconduct as a major legal concern for online businesses.


In the video, legal concern #1 is privacy issues and #3 is trademark and copyright issues, which are both subjects that 5 Star readers may also be interested in. I discovered the video over at Wilson Web and it was shot by Dr. Ralph F. Wilson during the recent SES conference.

In the video, Mr. Dozier says that most merchants need to tighten their screening processes and more closely monitor affiliate activities. Over at his site, Dozier Internet Law, he has a great article about the importance of affiliate screening and due diligence that all merchants should read. Affiliate Marketers: The "killer app" requires diligence up-front. I plan to send any clueless merchants that come to me for consults over to this article if they are using auto-approval for affiliate apps.

I hope none of the affiliates or merchants that read this forum ever have to face a lawsuit, but in the event you do, I suggest bookmarking Dozier Internet Law.

[cdorob]

That's actually a very good list of things that could go wrong in Affiliate marketing from black hat affiliate techniques. It would be excellent to have this list completed with more facts from the readers.

Ideas?

[Grail]

Excellent post, especially for us newbies trying to run an affiliate program.

Thanks for the info.

[Chet]

Some merchants let their affiliates get away with to much and at some point need to be liable. Especially review sites. If a person never tried a product or even seen it then they have no business reviewing it and recommending one product over another.