On September 23rd, 2016, the U.S. Court of Appeals for the Second Circuit affirmed a lower court ruling that LeadClick Media, LLC is liable for assisting third party affiliate marketers in the deceptive marketing of a weight-loss supplement. LeadClick recruited affiliate marketers that utilized fake news sites to direct online consumers to a weight-loss supplement website. LeadClick knew that the sites were fake and assisted in creating content on the sites. LeadClick also purchased advertising space from legitimate online news sites and used it for the fake news sites.
This is the first decision by a court of appeals holding that an affiliate marketing group could be liable for the deceptive acts of third party affiliate marketers. In making its ruling, the Court held, "that under the FTC Act, a defendant may be held liable for engaging in deceptive practices or acts if, with knowledge of the deception, it either directly participates in a deceptive scheme or has the authority to control the deceptive content at issue." This ruling extinguishes the otherwise clear division between the affiliate marketing group and the affiliate marketers when the affiliate marketing group is involved in the deceptive marketing.
The name of the case is: FTC v. LeadClick Media, LLC