Affiliate & MLM Attorney Guiding Advertising Practices Compliance


Internet businesses, marketers and affiliates must understand how they can become liable for their Internet marketing practices. Mr. Nicolosi assists clients review their email marketing practices, SEO campaigns, affiliate and reseller marketing practices and sponsored endorsements.

FTC Advertising liability is undoubtedly the biggest area of liability for anyone engaged in online marketing or direct website advertising. Mr. Nicolosi assists clients in understanding the nature of the FTC Act and all new disclosure requirements under the FTC’s 2009 revised guidelines. He has guided numerous business clients through FTC legal compliance, including website legal compliance.

-CAN-SPAM ACT Liability. Marketers and business owners must understand how to send commercial emails properly. One can easily violate the CAN-SPAM Act without knowing the requirements and some practical guidelines. Your chances of violating this particular law are very high if your operating in the dark. Violations can lead to some pretty stiff fines and in some cases can even land you in jail! There is no reason to take the chance of violating Federal law when you can simply arm yourself with the right information.

-COPPA (Children’s Online Privacy & Protection Act) Liability. Does your website or mobile app collect information from children? This is another area you don’t want to misunderstand since it applies to any websites that collect information from children. Violating this law can lead to some pretty serious consequences and you must understand what disclosures you need to make if you collect information from children.

-Avoiding Deception under the FTC Act. This is critical to online streams of revenue. No business or online practice, advertisement or claim can be deceptive. If anything you say or do related to e-commerce is materially misleading, its deceptive under the FTC Act. This means you may have to make necessary disclosures on your website or in your ads which are clear and conspicuous. Are you confident you understand how to avoid the materially misleading standard? See our page on FTC legal compliance to learn more about the FTC Act.

-Lotteries, Contests & Sweepstakes

Offering some type of promotion, such as a sweepstakes or contest to promote your website or business. Sweepstakes and contest promotions are regulated by numerous federal and state laws. Federal agencies with jurisdiction to regulate sweepstakes promotions include the Federal Trade Commission (“FTC”), the Federal Communications Commission (“FCC”), the United States Postal Service, and the United States Department of Justice (“DOJ”). Sweepstakes promotions are also regulated by some states. While sweepstakes and contests are generally permitted in most states, lotteries are not. Lotteries are generally prohibited in each of the fifty states unless legislatively exempted (i.e., state run lotteries).  Most states have concluded that where the elements of skill, whatever they may be, predominate over the elements of chance in determining outcome then the game involved does not violate that state’s anti-gambling law.

If you engage in these types of marketing practices, a qualified Internet attorney can fill you in on federal and state requirements. You’ll also want to include solid terms and conditions of the promotion to protect you or your business.


Liability From Affiliates & Resellers 

Affiliates and resellers can pose a potential source of liability to Internet businesses and, of course, to themselves. Violation of the FTC Act as a sponsored endorser or the CAN-SPAM Act with email campaigns can actually land both the affiliate/marketer and the underlying business in hot water. Mr. Nicolosi assists Internet businesses successfully deal with affiliates, marketers, bloggers, product reviewers, etc. He also helps Internet businesses and affiliates/resellers protect themselves during the affiliate or reseller relationship by drafting reseller and affiliate agreements that implement sound affiliate/reseller policies. We protect our clients by focusing on brand protection and quality control, avoiding advertising liability, commission payment, protection of valuable intellectual property and confidential information, etc. We understand the laws that govern online marketing and advertising and understand the pitfalls and mistakes affiliates, resellers and marketers can make.


MLM Pyramid Schemes & Business Opportunities

Multilevel marketing plans are evaluated by the method which the products or services are sold and the manner that participants are compensated. Essentially, if a MLM plan compensates participants for sales by their recruits, and their recruits, that plan is multilevel. If a program compensates participants only for bringing new recruits into the plan, it is an illegal pyramid scheme. Pyramid schemes are illegal under the FTC Act and under specific state anti-pyramid laws. We help MLM’s understand the laws regarding business opportunities and MLM Plans and how the FTC views these activities in general.

Business opportunity marketers should understand the requirements under The Business Opportunity Rule which went into effect March of last year.

Making blind earnings and income claims on your website is another area where our clients land in hot water. No claim can be deceptive and this includes misleading your visitors into believing they can achieve a certain result based on claims made on your  website, or by one of your affiliates. It is critical that you understand what needs to be disclosed when making earnings or results claims on your website. Attorney Philip A. Nicolosi has shown numerous MLM’s, affiliates, resellers and businesses how to avoid making deceptive earnings claims.


Using Website Disclosures Effectively

We show businesses, marketers and affiliates how to use required FTC disclosures effectively. You may be surprised to learn that you may have to use disclosures on your website in connection with some of your ads or representations. Affiliate and multi-level marketers need to understand how to meet the FTC’s required standard-the clear and conspicuous standard-for using and placing disclosures effectively on your website. This means you need to understand exactly where you should put website disclaimers. Website disclosures qualify and can make an otherwise deceptive ad or statement not misleading. They can be the difference between liability and properly using ads on your website.

The FTC Revised 2009 Guidelines now requires that websites disclose “generally expected results” with any customer testimonials. There is a lot of misinformation out there, including the notion you are now limited to ‘average results’ type testimonials only from your customers. It is extremely important you know how to use any necessary disclosures from the FTC’s point of view.

All sponsored endorsers need to now disclose any “material connection” with any third parties pursuant to the Revised Guidelines. This means marketers and affiliates who endorse and promote third party products or services must disclose what compensation or consideration they received from the seller or provider.