FTC Compliance Overview
If you're building a product to help your users share affiliate links, you may have wondered what requirements you have to meet to stay compliant with FTC (Federal Trade Commission) rules. The good news is that the FTC has a LOT of information about this topic and understands that incentivized sharing activity is a new area that's still emerging.
The FTC guidance as it relates to software boil down to this: The responsibility to disclose that a shared link is incentivized lies with the person sharing the link.
The spirit behind this policy is that anytime a behavior may be different because of an incentive, it needs to be disclosed to those consuming the shared link. If there's a software intermediary that is benefitting from the shared link but the sharer doesn't benefit (i.e. if you didn't share any revenue with your users), then the sharer's behavior isn't going to change.
Consider the following example: Let's imagine that your software can generate affiliate links for Reebok but not for Nike but you're not sharing any revenue with your users. The sharer (your user) is no more likely to share Reebok shoes than Nike shoes if they aren't getting an incentive to link to one brand over the other, even if the software is benefitting from one brand being shared more than the other. However, once the sharer is incentivized (i.e. earning on Reebok links and not Nike links), then the sharer's behavior could change to send more links to Reebok (and recommend a product that they wouldn't normally recommend over another). This gets at the heart of the FTC policy. Because there's a possible skewing of behavior (and an "inflation" of the recommendation) then the sharer must disclose that they are incentivized.
Even though there is no requirement for the software to disclose the incentive, we recommend you help your users comply with FTC guidelines as a convenience. A simple "#ad" or "#sponsored" after the shared link is enough to disclose incentivization. The Wildfire Systems Chrome Extension template automatically adds a "#ad" to generated links before they are shared and we recommend a similar tact for our partners.
See more information about the FTC incentive disclosure guidelines.