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Web Lawyer: Quickbooks Affiliate Disclosure – FTC Compliance or Advertising?

By December 3, 2009July 16th, 2010Website Lawyer

web-lawyer-quickbooks-affiliateCompliance with the new Federal Trade Commission (FTC) guidelines (effective December 1, 2009) is a scramble for both Internet entrepreneurs and large online companies. For Internet marketers who sell multiple products, using my experience as a Web lawyer, I’ve created affiliate compensation disclosures that can be used regardless of what is being sold. These documents are part of  Website Legal Forms Generator v. 2.0.

However, it appears that bigger companies are taking a proactive stance by requiring affiliates to place special banners specifically targeted to their products on the affiliate sites. Intuit’s QuickBooks Affiliate program now requires the banner shown to the left. Here are the instructions that came with it.

Please be aware of the recent FTC guidelines about product endorsements. Affiliates, bloggers, tweeters, and endorsers are now required to disclose their relationship with Intuit. Please let your audience know that you are an affiliate of Intuit. Please make these changes ASAP. We will be auditing landing pages next week. For more information, you can visit the FTC website: http://ftc.gov/multimedia/video/business/endorsement-guides.shtm

ACTION ITEM:

We have an “Authorized QuickBooks Affiliate” badge for you to post on your site. The badge should be placed somewhere prominent on your site to inform your audience.

Although as a Web lawyer and consumer advocate, I applaud the intent, these instructions are too vague. First, QuickBooks leaves it to your discretion where to place the banner. If you’re blogging, does this mean that you’re supposed to put it in every post that mentions QuickBooks? That would be reasonable.

My concern is that the intent of the banner is to encourage affiliates to put the banner in the sidebar, i.e. less about compliance and more about taking up valuable space with the QuickBooks banner. If every affiliate program operator requires a special banner to be placed in a sidebar regardless of post content, there won’t be enough room to fit all of the “badges.”

Quickbooks should allow a generic Affiliate Compensation Disclosure to suffice. There’s really no need to brand the material connection with the Quickbooks brand…except extra exposure for Quickbooks by using the badge as an advertisement. Note that nothing in the Federal Trade Commission guidelines requires the disclosure to state the name of the product or even the material connection details. As your Web lawyer can explain to you in detail, the guidelines require disclosure of the connection’s existence so that the reader knows that the content may be biased/tainted rather than an independent review of the product’s merits.

To your success!

-Mike the Web lawyer

Mike Young, Esq.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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