“The renowned MoreNiche Affiliate Marketing programme is a collection of Health, Beauty and Weight-loss affiliate programs that each offer high commission…” says the MoreNiche website, but the Office of Fair Trading recently took action over some of its practices as Manana Shrimpling reports.
Topic: Health & Beauty
Who: OFT and MoreNiche Ltd
Where: London
When: 25 April 2012
Law as stated at: 1 May 2012
What happened:
The Office of Fair Trading (OFT) has accepted legal undertakings from online affiliate marketing operator MoreNiche Limited (MoreNiche) to address concerns about the way affiliates in MoreNiche's network market and promote health and beauty products.
Each affiliate agreed with MoreNiche to include a link in the affiliate's website to a product merchant's site. In return, the affiliate received a commission for every sale made after clicking on the link.
MoreNiche's network brings together 30 product merchant businesses and over 149,000 affiliates. In this case the products in question included diet aids and teeth whitening products.
The OFT had concerns in relation to some of the affiliate marketing. In particular, it identified that reviews and product endorsements on the affiliates' websites were presented as independent consumer reviews when in fact they were commercial promotions.
The websites also did not make it clear that the affiliate would be financially rewarded for purchases made by consumers that the affiliate introduced to MoreNiche merchants. The OFT took the view that consumers are more likely to be influenced to buy products based on apparently unbiased reviews.
Following its investigation, the OFT concluded that breaches of the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) may have occurred due to the following commercial practices:
• the promotions did not disclose material information (i.e. that the promotion had been paid for or otherwise remunerated), or provided information that was unclear, unintelligible, ambiguous or untimely, and were therefore contrary Regulation 3(4)(b) of the CPRs;
• editorial content was used to promote a product where the promotion had been paid for, without making it clear that the promotion had been paid for in the content, contrary to paragraph 11 of Schedule 1 of the CPRs; and
• the promotions falsely claimed or created the impression that the affiliate was not acting for purposes relating to its business, or falsely represented the affiliate as a consumer, contrary to paragraph 22 of Schedule 1 of CPRs.
The undertakings given by MoreNiche require it to take sufficient steps within agreed timescales to ensure that affiliates do not continue or repeat such conduct when promoting MoreNiche merchants' products. For example, promotions must include a prominently displayed statement which would be unavoidable to the average consumer, stating that the promotion has been paid for or otherwise remunerated. MoreNiche has also agreed to provide guidance notes to affiliates in relation to their legal responsibilities.
Why this matters:
The nature of the undertakings given by MoreNiche will be of interest to other affiliate network operators who want to ensure that they and their affiliates are complying with the law. They highlight the responsibility of MoreNiche, as the operator of the affiliate network, to take sufficient, reasonably practicable steps to ensure that the affiliates within its network do not engage in unfair commercial practices when promoting products of MoreNiche merchants.
