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I mentioned an announcement from the FTC on the use of consumer information by affiliate marketers the other day, and admittedly the language was a bit confusing.
Fortunately, I received the following from Mark Meckler, General Counsel / Chief Operating Officer at Unique Leads, who clarified the situation.
I saw your blog post yesterday on the FTC’s new “affiliate marketing rules.” Thanks for working so hard to keep those of us in the industry up to date. You’re definitely reaching the right people, and I’ve already received several concerned calls from folks asking me to comment based upon what they read in your blog.
Based upon the reaction I’ve heard, and the concern people are expressing about the new rules, I thought you would want to know that these rules don’t really affect those of us in the “affiliate marketing” space, but are instead aimed at the transfer of “eligibility information” between “affiliated” companies. While the FTC’s press release headline (”FTC Approves Affiliate Marketing Rule Regarding Use of Consumer Information”) certainly seemed like this rule making was aimed squarely at us, a thorough read of the Federal Register makes it clear that this is not about “affiliate marketing” as we know and practice it.
Just so you can be comfortable with my analysis, I’ve provided a couple of important items from the Rules for you:
In the Rules, “affiliate” is defined as follows:
(b) Affiliate. The term “affiliate” means any company that is related by common ownership or common corporate control with another company.”
And the rules are intended to cover “solicitations” by an affiliate of a company who has collected “financial eligibility information” on a consumer. For example, these Rules apply in situations where your bank transfers “eligibility information” to an “affiliated” (common ownership) insurance company, and then the insurance company uses that information to market insurance products and services to you.
Here is the definition of “solicitation”:
(k) Solicitation. (1) In general. The term “solicitation” means the marketing of a product or service initiated by a person to a particular consumer that is—(i) Based on eligibility information communicated to that person by its affiliate as described in this part; and (ii) Intended to encourage the consumer to purchase or obtain such product or service.
(2) Exclusion of marketing directed at the general public. A solicitation does not include marketing communications that are directed at the general public. For example television, general circulation magazine, and billboard advertisements do not constitute solicitations, even if those communications are intended to encourage consumers to purchase products and services from the person initiating the communications.
(3) Examples of solicitations. A solicitation would include, for example, a telemarketing call, direct mail, e-mail, or other form of marketing communication directed to a particular consumer that is based on eligibility information received from an affiliate.
You’ll note that a “solicitation” (which is what this Rule addresses) is narrowly defined as marketing “Based on eligibility information communicated to that person by its affiliate”. As “affiliate” is narrowly defined as encompassing only companies with “common ownership or control,” it really isn’t applicable to our world of “affiliate marketers.” There is even a specific exclusion (shown above) that says that this doesn’t apply to solicitations to the “general public” which is precisely what we as affiliate marketers do.
Thanks a lot, Mark.