Jessica Ke
91 Geo. Wash. L. Rev. 537
Multilevel marketing businesses (“MLMs”) sell everything from makeup to protein shakes, from dietary supplements to legal services. During the COVID-19 pandemic, people facing income insecurity who wished to work from home turned to the social-media driven MLM business model in droves. Most MLM participants, however, make little, if any, money from their participation in the multibillion-dollar industry.
Recently, there has been a push to remove the exemption that excludes most MLMs from disclosure obligations under the Federal Trade Commission’s Business Opportunity Rule. Although this is a step in the right direction, disclosure itself is not a complete answer to the harm MLMs can inflict upon participants. This Note recommends that the Federal Trade Commission promulgate a rule identifying certain business practices used by MLMs as per se unfair using its rulemaking authority under Section 57a of the Federal Trade Commission Act. Doing so would allow the Commission to seek consumer redress from companies that violate the rule and exploit participants for economic gain.
