MoreNiche operates an affiliate marketing network which enables affiliate marketing businesses on that network to promote products offered by product merchant businesses. An affiliate which promotes the product of a MoreNiche merchant will, along with MoreNiche, earn money when a consumer clicks through from the affiliate's website to the merchant's website to make a purchase. MoreNiche's online network has 30 product merchant businesses and over 149,000 affiliate marketing businesses worldwide.
The OFT was concerned that, in breach of the Consumer Protection from Unfair Trading Regulations 2008, reviews and product endorsements running on some affiliate's websites were presented as independent consumer reviews when they were actually commercial promotions. The OFT believe that consumers are more likely to be influenced to buy products having read apparently unbiased reviews rather than reviews which were in fact clearly a form of advertising. The OFT took the view that the practices of affiliate websites amounted to:
- misleading omissions under the Regulations as they did not disclose material information or provided information in a manner that was unclear, unintelligible, ambiguous or untimely and
- unfair commercial practices as the editorial content did not make it clear that the promotion had been paid for and they involved falsely claiming or creating the impression that the affiliate was not acting for purposes relating to its trade or business.
MoreNiche cooperated with the OFT and signed undertakings to comply with the law. The undertakings require MoreNiche, as the operator of an affiliate network, take sufficient steps within an agreed timescale to ensure that affiliates within the MoreNiche network do not continue or repeat the prohibited conduct, which is defined as failing to take sufficient steps which are reasonably practicable to ensure that affiliates do not engage in unlawful commercial practice. There is an annex with examples of "reasonably practical 'sufficient steps'". MoreNiche agreed to dates by which to have completed manual reviews of top UK and non-UK affiliates and, later, all affiliates. It has to have, by September 2012, systems proactively to spot check 50% of its sales generating affiliates each year.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.