If Pinterest hadn’t gone after affiliate marketers, the FTC might have

On Friday, Pinterest banned affiliate links on its site, claiming that they cluttered up people’s feeds with spam. Most media companies called foul, saying that Pinterest was putting its own financial interest above its users, some of whom would lose big streams of revenue without affiliate links.

There’s truth to that, but it’s not the whole story.

Affiliate links connect a pinned image to the site selling the product. It’s an ad, essentially. But unlike promoted pins, these ads aren’t labeled as such. People with a lot of followers receive money from companies or advertisers to share these images. As a result, the affiliate pins surreptitiously creep into people’s Pinterest streams, disguised as hand-selected content.

This kind of native marketing is a mainstay in the social media era. Celebrities and influencers on all sorts of applications from Vine to Instagram do the same.

But just because it’s normal doesn’t mean it’s legal. The Federal Trade Commission banned these kinds of ads in March 2013, when it issued new online advertising guidelines that pertain to Section 5(a) of the Federal Trade Commission Act. Here’s an excerpt from the blog post announcing it:

If a disclosure is needed to prevent an online ad claim from being deceptive or unfair, it must be clear and conspicuous….The new guidance points out that advertisers using space-constrained ads, such as on some social media platforms, must still provide disclosures necessary to prevent an ad from being deceptive.

In other words, even if you’re marketing on Twitter or Pinterest you need to make it clear when an ad is an ad.

The FTC has already proved it’s not just paying lip service to the new guidelines. It went after an advertising agency on Twitter that published tweets about one of its clients’ products, Sony PlayStation Vita, without disclosing its ties.

The FTC thinks this kind of advertising is basically deception. As a result, there’s validity to Pinterest’s argument that it blocked affiliate links for its users’ own good. Of course, it’s also in Pinterest’s best interest because without another channel to push their ads, agencies will be forced to buy promoted pins directly from the company itself.

For some of Pinterest’s most prolific pinners, the ban will be a blow to their revenue stream. If Pinterest wants to keep them engaged and around, it will need to forge new partnerships to help these influencers make money in different ways.

Pinterest declined to comment on this story.