So, Amazon won't pay commission to affiliates who use links within Twitter to drive traffic. Is this fair? Is their policy right?

There are many different ways of looking at this problem. Let's take a look at Amazon's position. They are paying commission to affiliates who drive new customers through to their site. As part of this process, they ask affiliates to agree to their terms & conditions of use and these, at least from a legal perspective state that the traffic is related to "Your Site", referring to where the traffic comes from.

So from a legal standpoint, they would appear to be operating as per these terms but how long ago were these written? Were social media and the likes of Twitter such a big issue when they were last updated? When you consider recent stories about Dell generating $1M of revenue through Twitter alerts, you can certainly see that the medium has grown up but perhaps not everyone has been in tune with this change.

The problem with the wording is that any smart affiliate could simply start redirecting traffic from Twitter (or other community sites) through their own short URL tool, sitting on their site and as such would be sending this traffic to Amazon. From a legal standpoint this would appear to meet their requirements but it still leaves an open question. Is Amazon happy about that type of traffic?

Affiliate marketers are often the folks that are able to spot an opportunity and take advantage of it much quicker than most brands. See a gap, code it, get it live at 2am. If someone on Twitter likes talking about rock music and inserts links to Amazon for the albums they are tweeting about, is that so dissimilar to if they had a blog and these comments were posted there? They seem pretty close to me.

From a brands perspective, they need to ensure that consumers aren't being spammed and that they only pay affiliates for genuine activity rather than having a cookie pool covering everyone in the country. But this is where working with your affiliates is key. Understand what they are doing and you'll be a little less nervous when something new appears.

Lawyers, time to update your affiliate terms and conditions to help your affiliates know exactly what you are happy paying for and what you aren't. Be upfront about it and they'll be a happier bunch, working on your behalf and ultimately driving revenue.