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Transcript of © Hogan & Hartson LLP. All rights reserved. Affiliate Marketing: How To Ensure Your Third Parties...
© Hogan & Hartson LLP. All rights reserved.
Affiliate Marketing:How To Ensure Your Third Parties Are
Meeting Privacy Obligations
Mary Ellen Callahan, Hogan & Hartson Quinn Jalli, Datran Media
Cambridge, MassachusettsAugust 22, 2007
© Hogan & Hartson LLP. All rights reserved. 2
What Is Affiliate Marketing?
• Working with other companies
– Ad Networks
– Affiliate programs & networks
– Third-party e-mail marketers
– Offline direct marketers
• Various payment approaches
– Pay Per Click /Action
– Pay Per Lead
– Shared Revenues
– Pay for delivery
• Way to leverage own database more effectively
• PII often necessary to share for affiliate monitoring, but also as part of the leverage
© Hogan & Hartson LLP. All rights reserved. 3
How Does Affiliate Marketing Differ From Conventional Marketing?
• Potentially joint ownership / use of consumer data
• Multiple privacy and contractual representations
• Transparency of transactions
© Hogan & Hartson LLP. All rights reserved. 4
Getting To Accountability
• Regulatory framework to be accountable for acts of affiliates
– CAN-SPAM: obligations imposed on advertiser, additional obligations on initiators
• Implicit need to monitor actions of affiliates
– Gramm-Leach-Bliley: financial institutions must also require compliance by its vendors and service providers
– Section 5: prohibits unfair and deceptive trade practices. Application to affiliates?
© Hogan & Hartson LLP. All rights reserved. 5
Getting To Accountability
FTC Actions• Cases brought by the FTC in several areas have suggested
that marketers, leveraging affiliates, should monitor affiliate behavior
– TJ Web – Jan 2007 settlement includes obligations on affiliate review, based on CAN-SPAM
– Optin Global
– Cleverlink Trading Ltd.
– Zango
– Cart Manager – March 2005• Director of Bureau of Consumer Protection’s press release statement
of monitoring activities: "Companies and [vendors] must make sure that their privacy policies are in sync. A [vendor] cannot secretly collect and rent consumers' personal information, contrary to a merchant's privacy policy. At the same time, merchants have an obligation to know what their [vendors] are doing with consumers‘ personal information.”
© Hogan & Hartson LLP. All rights reserved. 6
Getting To Accountability
New York Attorney General Actions
• New NY AG Cuomo settles with major advertisers in Jan 2007 --online promotion of products and services through another’s alleged deceptively installed adware programs
– Priceline
– Travelocity
– Cingular
© Hogan & Hartson LLP. All rights reserved. 7
In what circumstances do companies have a legal obligation to monitor
affiliates?
What affirmative actions should your company take to avoid any law
enforcement action?
© Hogan & Hartson LLP. All rights reserved. 8
Policies & Procedures
• Establish necessary and reasonable policies and procedures, depending on the level of relationship.
– It’s your playground, make the rules.
– Know thy affiliate.
– Don’t turn a blind eye.
© Hogan & Hartson LLP. All rights reserved. 9
Playground Rules
• Establish standard operating procedures for the relationship.
– Keep standards consistent.
– If company doesn’t meet standards, don’t bend rules late then in – could be weak link.
– Develop deployment strategies.
– Rules for marketing: channels, media, frequency.
© Hogan & Hartson LLP. All rights reserved. 10
Know Thy Affiliate
Develop monitoring techniques to detect abuse
• Utilize seeds
• Leverage brand-monitoring solutions that identify brand abuse
• Ensure marketers are honoring channel representations
• Verify /contractually require affiliates to use reputable partners
• Understand data collection and use policies (and get contractual representations re: same)
• Review applicable privacy policies as appropriate (PII in particular)
• Monitor suppression list and complaint activities
© Hogan & Hartson LLP. All rights reserved. 11
Blindness
The recent enforcement activities indicates that if you have a close relationship with purportedly bad actors, you could be held liable for their actions, even if you did not dictate them.
© Hogan & Hartson LLP. All rights reserved. 12
Contact Information
Mary Ellen Callahan, Esq.Partner
Hogan & Hartson555 Thirteen Street NWWashington, DC 20004
Tel: (202) 637-6406Fax: (202) 637-5910
Email: [email protected]
Quinn Jalli, Esq. Privacy Officer and Vice President of ISP Relations
Datran Media345 Hudson Street, 5th floor
New York, NY 10014Tel: (212) 706-4897
Fax: (212) 706-9758Email: [email protected]