The new FTC Direct Selling Guidance arrived in January, 2018. It built on the goodwill dialogue between the FTC and the direct selling industry that was ushered in by a well-received DSA presentation of acting Chairperson Maureen Ohlhausen in November, 2017.read more »
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Visit our videos page for over 140 videos covering common questions and concerns in the direct selling industry, including startup, software, technology, compensation plans, legalities, startup kits, products/services, trademarks, pyramid schemes, MLM startup conference, FAQ, merchant accounts, industry history, and so much more. Click the images below to view the video pages and sections.
Timely Articles on the Network Marketing Industry
Executive Summary: The legal environment and the accepted business model of leading direct selling companies has been relatively stable for 50 years. That equilibrium was upset by the regulatory proposals of a former FTC commissioner to upend that environment with new arbitrary rules that lack a basis in case authority or legislation...read more »
What a difference a year makes. In a well-received presentation to the November, 2017 DSA Regulatory Conference, FTC Acting Chairperson, Maureen Ohlhausen, struck a totally different tone in regard to forward looking FTC enforcement policy on direct selling, contrasted with the October, 2016 presentation of former FTC Chairperson, Edith Ramirez.read more »
FTC v. BurnLounge: 10 point mini-primer and action plan on the "personal use" issue. FTC stated policy has been to prosecute egregious pyramid schemes as opposed to mainstream direct selling. By and large, this has been the case since the famous 1979 FTC Amway unsuccessful prosecution.read more »
The 2012 billion dollar short seller attack on Herbalife, a 32 year old NYSE listed direct seller of nutritional products in 80 plus countries with annual sales in excess of $3 billion, is akin to a replay of seminal challenge to the MLM/Direct Selling model, won by Amway in 1979. In the Matter of Amway, 93 F.T.C. 618 (1979).read more »
BurnLounge Appeal Decision: Guidance on Pyramid v Legitimate MLM and the Role of Personal Use in Pyramid Analysis
On June 2, 2014, in the case of FTC v. BurnLounge, the U.S. Court of Appeals for the Ninth Circuit issued a seminal decision, affirming a lower court finding that the BurnLounge MLM (multilevel marketing) program was an illegal pyramid scheme...read more »
OIn March 2018, Google followed Facebook in banning cryptocurrency ads. Why? It was too hard to identify the legitimate from the illegitimate advertiser and that out of control speculation and fraudulent financial schemes were creating confusion for the consumer experience. Given that more than 80 percent of Google revenue derives from ads, Google was rightfully concerned that rampant fraud buried in its signature product, online advertising, could dilute its "brand" and poison the receptive market of its readers and product consumers, its advertisers.read more »
The July, 2016 settlement between the FTC and Herbalife is likely to have a profound impact on the direct selling industry. But, what that impact will be is uncertain. Markets do not like uncertainty.read more »
On July 14, 2016, the FTC and Herbalife concluded a multiyear investigation with a Stipulated Settlement that both, brought the investigation to a close, and delineated a going forward set of rules by which Herbalife would conduct its direct selling business. Given the fact that Herbalife is one of the largest global direct selling companies, the direct selling industry is quite focused on the meaning of the settlement to the industry, both short-term and long-term. And given the immense power of the FTC, the direct selling industry will wonder how much regulation it can withstand before it suffers irreparable harm.read more »
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About Attorney Jeff Babener and MLMLegal.com
Jeffrey A. Babener, of Portland, Oregon, www.mlmlegal.com, is the principal attorney in the law firm of Babener & Associates. He represents leading U.S. and foreign companies in the direct selling industry. He has been a key advisor to such companies as Avon, Amway, Team National, Herbalife, Discovery Toys, Nikken, Shaklee NuSkin, Excel, Usana, Fuller Brush, Cell Tech, Enagic, Sunrider, Melaleuca, Nerium International, etc. He is a frequent lecturer and has been interviewed on the industry, and published, in such publications as Money, Inc., Atlantic Monthly, Success, Entrepreneur, Kiplinger's Personal Finance, Home Office Computing, Business Start-Ups, Direct Selling News Magazine, and Money Maker's Monthly. He is editor of the industry publication, Direct Sales Legaline. Mr. Babener is also the author of the books; Tax Guide for MLM/Direct Selling Distributors, Network Marketer's Guide to Success, The MLM Corporate Handbook, Network Marketing: Window of Opportunity, and Network Marketing: What You Should Know (used as the college curriculum textbook at Utah Valley State course on network marketing). He is editor of one of most frequented network marketing educational web sites, www.mlmlegal.com . He has served as Chair of more than 70 national conferences on starting and running the direct selling company. He serves on the Lawyers Council and Government Relations Committees of the Direct Selling Association (DSA), and he has served as General Counsel and on the board of the MLMIA (Multilevel Marketing International Association). He has lectured at major industry trade meetings and at such educational institutions as the Univ. of Illinois, University of Texas, University of Houston, etc. He is a graduate of the University of Southern California Law School where he served as an editor of the USC Law Review, followed by the appointment as a law clerk to Hon. David Williams, U.S. District Court for the Central District of California.
A number of Babener & Associates client companies have been success stories over the last several decades, including several billion dollar and NYSE companies such as Avon, Herbalife, NuSkin, Usana. Other successful companies, to which the law firm has provided varying level of advisory, have included Melaleuca, Nikken, Enagic, Discovery Toys, Amazon Herbs, TriVita, Nerium International, Shaklee, PrePaid Legal, Tupperware, Primerica, Arbonne, Longaberger, Excel Communications, ACN, etc.
Mr. Babener has served as lead trial counsel for multiple cases on direct selling throughout the U.S. Further background material on direct selling will be found at the website, www.mlmlegal.com, where he is editor.
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