Great question — answering as the UphillTech team:
I can't answer about laws, but some of us are transparent in our affiliations and other issues. It builds trust. I run a web hosting business and learned a lot from my early days when I was with Dreamhost. They have a policy of honesty and transparency with all sorts of issues. Like I said, it built a huge level of trust. On the other hand godaddy are so secretive and opaque about issues, going as far as denying them, I won't have anything to do with them. I doubt there is a 'best practice' for this, or even a law, but I can tell you that being honest, even when things go really wrong, is appreciated by customers.
Full answer by Steve: https://webmasters.stackexchange.com/a/104059 (CC BY-SA 3.0).
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