Yes, affiliate marketing is legal in Australia. However, affiliate marketers must comply with the Australian Competition and Consumer Commission’s Australian Consumer Law (ACL). By obeying local laws and legislation, you avoid penalties, bans, and lawsuits. You must also follow the guidelines set by your country’s national governing bodies. For example, the European Union has the General Data Protection Regulation (GDPR), while the U.S. has the Federal Trade Commission’s Endorsement Guides. These national laws and organizations aid the affiliate marketing industry in addressing illegal affiliate activities.
While affiliate marketing can offer you an average passive income of $10,000-$50,000 annually, this industry has its deal of legal challenges. In fact, a complaint was filed by the Federal Trade Commission (FTC) back in 2018 against My Online Business Education (MOBE) for scamming $125 million from its consumers. The affiliate marketers involved paid over $4 million to settle the charges. These facts highlight the importance of knowing the legal requirements, obligations, and risks involved as an affiliate marketer.
You must know what makes affiliate marketing legal in Australia to build a successful affiliate marketing business. Thus, it is crucial to have ample knowledge and a clear understanding of the 4 legal rules of affiliate marketing in Australia. This way, you slash the risk of legal drawbacks and build a profitable business.
What is Affiliate Marketing?
Affiliate marketing is a performance-based business model where you promote other people’s services or products. You get an affiliate commission for every sale you make when customers click your affiliate link and purchase a specific affiliate product. Most affiliate marketers join an affiliate network to find a suitable program easily. You can also directly transact with an affiliate partner if you’d like. Some reputable affiliate networks and programs include CJ Affiliate (previously Commission Junction), Rakuten Advertising, Amazon Associates, and Fiverr Affiliates Program.
Is Affiliate Marketing Legit in Australia?
Yes, affiliate marketing is legit in Australia. According to a survey by Commission Factory and the IAB Affiliate Marketing Taskforce, 75 out of 100 top retailers in Australia are using affiliate marketing. Another survey by the IAB Australia Affiliate Marketing Working Group showed that 72% of businesses attain a higher return on investment (ROI) with affiliate marketing compared to other marketing efforts.
Aspiring affiliate marketers and potential customers usually ask, “Is affiliate marketing scam or legit?” Many studies and surveys found that affiliate marketing is legit in Australia. In fact, Australian businesses budget around $930 million yearly in affiliate marketing for their digital marketing spend.
4 Legal Rules To Consider as an Affiliate Marketer in Australia
Australian Consumer Law (Section 18)
Section 18 of the Australian Consumer Law states that anyone engaging in trade or commerce, such as affiliate marketers, must not deceive or mislead their customers. Hidden disclaimers, false advertising, and incorrect prices are some examples of such unlawful behavior. Breaking this law leads to a penalty of $2.5 million (individuals) to $50 million (corporations) or jail time. Affiliate marketers can avoid this by using proper disclosures and ensuring their affiliate programs and products are legitimate.
Do Not Call Register Act 2006
The Australian Communications and Media Authority (ACMA) oversees this legislation. This act minimizes unsolicited marketing calls or faxes from marketers to consumers. It promotes the free use of the Do Not Call Register database, where consumers can securely register their mobile, home, and fax numbers. The Do Not Call Register system is also accessible in different countries like the UK, France, the U.S., Singapore, Canada, and India under different laws or governing bodies. Affiliate marketers who breach this act will receive a penalty of $222,000 to $2.2 million per day of contravention. Thus, it is essential to seek proper permission before telemarketing.
Spam Act 2003
The Australian Parliament passed the Spam Act of 2003 to manage the use of commercial email or any other types of commercial electronic messages. It prevents spam messages that are unsolicited. The customers must first allow these marketing communications before affiliate marketers can send promotional text messages or emails. These marketing efforts must also have the individual or organization’s information and an unsubscribe feature. Failing to meet these guidelines leads to a monetary fine of $44,000-$220,000 (individuals) and $220,000-$1.1 million per day of infringement.
Privacy Act 1988
This Australian law deals with regulating how organizations and businesses handle an individual’s personal information. It gives consumers the right to their personal information, including its collection and use. Affiliate marketers have to show cookie disclosures clearly on their websites to inform website visitors about what information is collected, how it will be used, and who it will be disclosed to. With the Privacy Act of 1988, your customers have control if they want to stop receiving marketing communications. The penalty for violating this act is a fine of up to $2.5 million for individuals and $50 million for corporations.
What are the Legal Requirements for Affiliate Marketing in Australia?
You must comply with these legal requirements before starting your affiliate marketing business, advertising your affiliate link/s, and sending promotional emails. These steps will prevent you from getting banned and acquiring lawsuits.
What are the Legal Obligations of an Affiliate in Australia?
Do You Have To Pay Tax on Affiliate Marketing in Australia?
Yes, you have to pay tax on affiliate marketing in Australia. Any income you earn from affiliate marketing activities is taxable under the Income Tax Assessment Act of 1936 and 1997. According to the Australian Taxation Office (ATO), you will earn a Failure To Lodge (FTL) penalty if you don’t pay your affiliate marketing tax in Australia. A penalty of $275-$1,375 per 28 days overdue is given to the offenders.
Do You Need an ABN for Affiliate Marketing in Australia?
No, you don’t need an ABN for affiliate marketing in Australia. However, ABN Australia suggests that affiliate marketing businesses acquire one because of its numerous benefits. An Australian Business Number (ABN) allows businesses to register for and claim Goods and Services Tax (GST), open business bank accounts, and do commercial negotiations. It is still better to contact the Australian Business Register to make sure if you are entitled to an ABN.
What are the Legal Risks of Affiliate Marketing in Australia?
What Makes Affiliate Marketing Illegal in Australia?
Breaking the Australian Consumer Law, Do Not Call Register Act, Spam Act, and Privacy Act are what makes affiliate marketing illegal in Australia. When you engage in affiliate scams and frauds, you risk incurring a significant monetary penalty or jail time. Deceitful advertising is also illegal. It damages the affiliate marketing industry’s reputation and potential revenue.
A study by Professor Roberto Carvazos of the University of Baltimore showed that affiliate marketers lose over $20 billion dollars in ad fraud annually. And according to CHEQ, this amount reached $35 billion in 2020 and is increasing by 17% yearly. Affiliate marketers must learn to spot these affiliate frauds to slash the growing damage to the affiliate marketing industry.
10 Tips for Ensuring Legal Affiliate Marketing Activities in Australia
Follow Australian laws, acts, and other consumer guidelines.
Run a background check on your chosen brand’s affiliate partnership or platform.
Make sure your affiliate website complies with your affiliate partner’s stipulations.
Abide by the policies of the social media platforms you use.
Advertise your affiliate products clearly.
Seek customer consent for collecting and using personal information, specifically for marketing promotions.
Join the best affiliate marketing courses that are legit.
Create an affiliate marketing strategy that is simple, compliant, and feasible.
Read affiliate terms and contracts carefully before signing.
Consult with a legal expert if you’re unsure about specific rules or terms.
Is Affiliate Marketing Profitable in Australia?
Yes, affiliate marketing is profitable in Australia, given that you make around $1,000 to $5,000 monthly. According to Influencer Marketing Hub’s 2022 Benchmark Report, 57.55% of affiliate marketers earn up to $10,000 yearly. Google Trends also shows an 82% increase in affiliate marketing online searches in Australia from Jan 2018 to Jan 2024. This means that the affiliate marketing industry is growing. Beginner affiliate marketers in Australia can find this business model to be profitable in 2024. Also, you can check some of the top high ticket affiliate marketing programs in Australia.
Is Affiliate Marketing Worth It in Australia?
Yes, affiliate marketing can be worth it in Australia as long as the affiliate marketing industry and buying trend is still growing. A survey by IAB Australia revealed that the average monthly spending in affiliate marketing in Australia increased by 6% in 2022 compared to 2021. This shows the surging interest of Australian brands and advertisers to engage in affiliate marketing.
Is affiliate marketing worth it in 2024? Yes, affiliate marketing is worth it in 2024, especially if you partner with legal affiliate programs in Australia. Commission Factory, Kmart Affiliate Program Australia, ClixGalore, and Crazy Domains are the top affiliate programs in Australia. Joining affiliate marketing Australian courses is also a great way to start your journey with this business model. In fact, IAB Australia’s training and development team has made a free industry training on Affiliate and Partnership Marketing. However, for those Aussies that don't prefer affiliate marketing, there are many other online business ideas in Australia to consider.
Affiliate Marketing Related Articles
Local Lead Generation is Far Less Complicated Than Affiliate Marketing
Affiliate marketing is a profitable business model that can drive you to promote various affiliate products, grow your audience base, and make up to $10K-$100K in income yearly. However, reaching $100K takes significant time, effort, and money. You have to do in-depth market research, customer buying behavior monitoring, and product analyses to find the most profitable niche and sell high-ticket products or services.
Alternatively, local lead generation is far less complicated than affiliate marketing. You don’t need to deal with market saturation, physical products, and exhaustive online marketing. With this business model, you dive into local service niches and manage digital assets like websites and blogs. And because your target audience is ready to buy, all you need is a simple but engaging marketing plan.
Local lead generation is much more profitable and scalable. You can capture more high-value leads by building websites that promote local services and rank high in Google search results. This will drive sizable leads to contact you. Forwarding them to local business owners can make you over $50,000 in passive income monthly. The best thing is that you can expand to different local niches and increase your potential monthly income.
