CompaniesOne of the differences between some network marketing companies and pyramid schemes is the presence of customers who don’t participate in the income opportunity.
For many network marketing companies, however, there are very few retail customers who aren’t also independent representatives.
In the Omnitrition, Trek Alliance, and Equinox cases, courts found problems with the payment of commissions on sales of products to participants in the income opportunity. Even so, these court case precedents do not constitute laws.
Network marketing companies operate under the jurisdiction of several types of legal authorities, including the Federal Trade Commisssion, the Food and Drug Administration, state laws, and the activities of State Attorneys General.
To operate legally and avoid being classified as a pyramid scheme, many MLM attorneys recommend that that network marketing companies do all of the following:
