Amazon Associates’ Child Directed Policy, COPPA, and Your Website

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Amazon recently emailed its affiliates (called Amazon Associates) to let them know that “sites targeted at children under 13 are not eligible to display links and advertising from the Amazon Associates program.”

Amazon sells children’s clothing, toys, games, etc.

So why would the company do this?

The reason is simple: potential legal liability.

There’s a U.S. law known as the Children’s Online Privacy Protection Act of 1998 (COPPA). This makes it difficult to legally do business online with websites that target (directly or indirectly) children because there are many extra requirements for doing so. If your website violates the law or related regulations, chances are you’re exposing yourself to lawsuits and government investigations by the U.S. Federal Trade Commission (FTC) and other consumer protection agencies.

If you’re an Amazon affiliate, the company doesn’t want to end up being liable for you putting ads on a site that violates COPPA.

What if your site isn’t targeted at young children?

You probably ought to make that clear on your site, both in your content and the website’s legal documents. That’s why the customized site documents I draft for clients (privacy policies, terms and conditions, etc.), and my legal forms generated by Website Legal Forms Generator software (http://LegalFormsGenerator.com), inform visitors that a site is not intended for children and imposes limits on how minors can use the website with parental involvement.

What if you do have a children’s website covered by COPPA?

Have a qualified Internet business lawyer review your site to ensure you’re not violating COPPA. Let’s face it. If Amazon thinks there’s a legal risk, chances are you don’t want to violate that law either.

When Should You Use An Affiliate Program Agreement?

By | Internet Lawyer, Website Lawyer, Website Legal Documents | No Comments

affiliate program agreementBelieve it or not, there’s a lot of confusion as to when you should have a written affiliate program agreement as part of your website legal protection.

Related Article: 5 Warning Signs You’re Using The Wrong Website Legal Documents

Many website owners confuse a program agreement with affiliate compensation disclosure or mistakenly believe they need an affiliate program agreement when they are marketing on their website as an affiliate for someone else’s products/services.

Do you run an affiliate program for your own products and services?

You’ll want to have an affiliate agreement on your site if you’re running an affiliate program, that is, you’re having others promote your products and/or services as an affiliate in exchange for compensation (such as an affiliate commission).

What is an affiliate compensation disclosure?

In contrast, an affiliate compensation disclosure is legal language that discloses your affiliate status (a “material connection”) when you’re marketing others’ products and services.

Related Article: 5 Business Website Disclosures And Disclaimers

Purpose of an affiliate program agreement

Getting back to the affiliate program agreement…its purpose is to state the respective rights and responsibilities of you as the program operator and your affiliates. Done correctly, it can minimize your risk of getting defrauded, sued, or even investigated by the government because of affiliate marketing misconduct.

Perhaps even more importantly, an affiliate program agreement can help you protect your online reputation.

How? By setting reasonable boundaries on the type of marketing that can be done by your affiliates, you’re maintaining your good name. After all, as your representatives, your affiliates have the ability to make or break your Internet reputation.

Where do you get an affiliate program agreement?

The logical place to start is a consultation with a qualified Internet lawyer.

Of course, if you cannot afford to pay an attorney, an affordable alternative are the professional grade website legal forms written by Internet Lawyer Mike Young and generated by Website Legal Forms Generator software. The forms include an affiliate agreement for affiliate program operators.

Connecticut Internet Sales Tax Hurts Affiliate Marketers

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What is the new Connecticut Internet Sales Tax supposed to do?

Connecticut has recently passed a bill which requires internet retailers to charge a sales tax on all goods sold in Connecticut if the internet retailer has a physical presence in the state.

Connecticut lawmakers considered the law necessary to hold Amazon.com and other online retailers accountable like all other businesses in the state. Lawmakers argue that it is not fair for Connecticut based ‘brick and mortar’ business to be subject to the state’s sales tax while Amazon.com is not. Aside from raising funds for the state in this time of economic uncertainty, the bill was also designed to protect Connecticut business from being unfairly outsold by online retailers not subject to the same tax laws.

Why did Amazon.com pull out of Connecticut?

The United States Supreme Court has ruled that a state can only tax an entity if that entity has some kind of a physical presence in the state. Regardless of whether Amazon.com has an actual physical ‘brick and mortar’ presence in Connecticut, the Connecticut legislature’s bill considers Connecticut-based bloggers and other internet content providers who advertise for Amazon.com a sufficient physical presence to subject Amazon.com to the tax. These bloggers and others or ‘affiliates’ advertise for Amazon.com because they receive a portion of the revenue generated by users accessing Amazon through their site.

After the new Connecticut Internet Sales Tax was passed, Amazon.com decided that it would rather give up on Connecticut based affiliates than be forced to pay Connecticut’s sales tax. In its economic calculation, Amazon probably found it more profitable to continue selling goods in Connecticut without having to pay the tax, than it would have been to continue advertising with Connecticut-based affiliates, while being subject on all sales to Connecticut’s new tax.

What effect will the Connecticut Internet Sales Tax have on Connecticut and on Amazon.com?

The immediate effect of the Connecticut Internet Sales Tax has been both a loss to Amazon.com and a loss to the Connecticut based affiliates that had previously generated income from Amazon’s advertisements on their websites. Amazon.com suffers to some extent because it can no longer advertise on the popular Connecticut blogs and websites it on which it had previously been an active advertiser.

To the Connecticut based affiliates, the Connecticut Internet Sales Tax will be perhaps even more traumatic. Not only is Amazon.com prevented from advertising on Connecticut based websites, but other online retailers might also fear subjugation to the Connecticut Internet Sales Tax, and avoid placing any advertisements on Connecticut affiliates websites. Perhaps the law is fair in the long run, as it prevents online retailers from having an unfair advantage, but in the short term, the Connecticut Internet Sales Tax cannot be said to be popular with either online retailers or the Connecticut-based affiliates that were once dependent on them.

Affiliate Marketing And Fake News Reports

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Ask your Internet attorney about "news" marketing

As an Internet attorney who conducts website legal audits, here’s an issue that comes up all of the time.

If you believe in a product or service that you’re promoting as an affiliate, can you provide “news” about the product? That’s a question that’s coming back to haunt affiliate marketers.

In April, the FTC filed lawsuits against marketers who claimed to be reporting news about weight loss products that were in fact nothing more than sales pitches containing unverified claims.

According to the FTC, “[m]illions of consumers are being lured to websites that imitate those of reputable news organizations.  The “reporters” on these sites supposedly have done independent evaluations of acai berry supplements, and claim that the products cause major weight loss in a short period of time with no diet or exercise.  In reality the websites are deceptive advertisements placed by third-party or ‘affiliate’ marketers.  The websites are aimed at enticing consumers to buy the featured…weight-loss products.  These fake news operations are the subject of a nationwide law enforcement initiative.”

“Almost everything about these sites is fake,” David Vladeck, director of the FTC’s Bureau of Consumer Protection, said in a statement. “The weight-loss results, the so-called investigations, the reporters, the consumer testimonials, and the attempt to portray an objective journalistic endeavor.” – FTC takes aim at deceptive ads, Minneapolis Star Tribune (May 22, 2011).

When you’re promoting a product or service online for your own business, or as an affiliate marketer, make sure you don’t cross the line into deceptive marketing with tactics like fake news reports or reviews. Your Internet attorney can help you tread through this cyber legal minefield.

Best wishes,

-Mike the Internet Attorney

Office Of Fair Trading Wants You To Disclose More

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Internet attorneyLike the US Federal Trade Commission (FTC), the UK’s Office of Fair Trading is taking the stance now that you should disclose you’re being compensated (as an affiliate, celebrity, or otherwise) when promoting goods and services online. As an Internet attorney, it isn’t surprising to see government agencies adopt this view.

The goal is to make sure the readers of what you write understand you may be biased because bucks (or euros) are involved. We’re talking about being honest instead of deceiving someone to earn some extra dough.

Here are a couple of things you can do to reduce your risk of getting in trouble. Your Internet attorney can provide you with more.

1. When you’re tweeting, be sure to include “spon” or “ad” in your affiliate tweets.

2. And whether you’re using static websites or dynamic blogs, be sure to disclosure material connections, such as an affiliate relationship. One of the ways to do this is to use a website Compensation Disclosure Policy.

To your online success!

-Mike the Internet Attorney