A Look Into FTC's Thinking On Pyramid Scheme Potential

By Branko Jovanovic, Pablo Robles and Jeremy Smith (March 23, 2020, 10:13 AM EDT) -- Recent decisions and resolutions issued by the Federal Trade Commission have indicated features of multilevel marketing, or MLM, companies that the FTC views as problematic.[1] For example, since 2014, the FTC has released complaints and stipulations that identify aspects of Vemma Nutrition Co.'s,[2] Herbalife Ltd.'s[3] and AdvoCare International LP's[4] business models that it views unfavorably.

Given the uncertain nature of regulation surrounding the MLM industry, MLM companies are closely following these complaints and stipulations, as well as speeches by FTC leaders.[5]

In December 2019, however, Ginger Jin, former director of the FTC's Bureau of Economics; Andrew Stivers, FTC deputy director; and...

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