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Federal Trade Commission

Special Edition: A Wake-up Call
Publisher's NoteSeptember 2021

Special Edition: A Wake-up Call

Our opponents are rewriting their strategies and uniting. We must do the same.

Hello readers! Since taking over as Publisher of SSN, I have remained committed to keeping you informed on the topics and trends that have the greatest impacts on the direct selling channel and its future. 

Over the past year, we have brought you stories of resilience and innovation as companies were forced to pivot after COVID-19 shutdowns. We covered the rise of the anti-MLM movement as well as the role of social media in shaping both positive and negative views of network marketing.

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September 1, 2021 0 comment
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FTC 2.0 – In Their Own Words
Cover StoryDirect SellingFeatures

FTC 2.0 – In Their Own Words

Commissioners outline an aggressive new strategy with direct sellers in their sights.

The Federal Trade Commission is in the midst of a sea change—a change in leadership, a change in ideology and a change in philosophy. Signaling the most significant course correction of the past 40 years, the Commission is reversing a self-imposed disarmament from the 1980s deregulation era while at the same time asking Congress to strengthen its powers under the FTC Act. This revitalized Commission has also released a target list, and direct selling is on it. 

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September 1, 2021 0 comment
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Serious Business: The FTC’s Re-Deployment of the Penalty Offense Authority
Cover StoryDirect SellingFeaturesVoices

Serious Business: The FTC’s Re-Deployment of the Penalty Offense Authority

By: Kevin Grimes
From the perspective of the FTC, the POA would appear to be a perfect weapon for quickly bringing about industry-wide change.
The FTC has expressly stated and given clear notice that deceptive income claims and unsubstantiated product claims in the direct selling industry are one of its top five targets.
The Penalty Offense Authority (POA) allows the Federal Trade Commission (FTC) to seek civil penalties against a wrongdoing party where: (1) a final cease and desist order has been entered against a party in an administrative proceeding under Section 5(b) of the FTC Act; (2) the order identifies a specific practice as unfair or deceptive; and (3) a party with actual notice of the order has engaged in that practice after the order became final.

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September 1, 2021 0 comment
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How Pending Legislation Could Affect Your Company’s Compliance Strategy
Cover StoryDirect SellingFeaturesVoices

How Pending Legislation Could Affect Your Company’s Compliance Strategy

By:  Larry Steinberg and William Miller
For companies that use web-monitoring services to identify possible policy violations, is it a reasonable business practice to limit the search parameters to only go back a certain number of years?
...older posts can still become a trigger for a regulatory investigation, and can still cause public relations and other problems.
When it reversed 40 years of appellate precedent by ruling that Section 13(b) does not authorize the Federal Trade Commission to seek monetary relief, the Supreme Court relied not only on the language of Section 13(b), but also on the presence of other provisions in the FTC Act, which expressly allow the FTC to obtain monetary relief for consumers. 

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September 1, 2021 0 comment
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The FTC is on the Warpath — Time to Rally the Troops
Cover StoryDirect SellingFeaturesOpinion

The FTC is on the Warpath — Time to Rally the Troops

As pressure mounts, what we do now as an industry matters

By:  Jonathan Gilliam, CEO, Momentum Factor
Opponents of the channel appear to have taken a war footing, and what we collectively do now as an industry will determine the future of this great business model we love.

Over the past 18 months, the Federal Trade Commission’s targeting of the direct sales channel has become increasingly aggressive and the channel may now be under the most intense regulatory and public scrutiny it has ever faced. Opponents appear to have taken a war footing, and what we collectively do now as an industry will determine the future of this great business model we love. 

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September 1, 2021 0 comment
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Lina Khan Takes the Helm at FTC
Cover StoryDirect SellingFeatures

Lina Khan Takes the Helm at FTC

Young firebrand rides wave of anti-corporate sentiment to become top regulator

By:  David Bland The Federal Trade Commission (FTC) is under new leadership. On June 15, 32-year-old Lina Khan was confirmed by the U.S. Senate in a 69-to-28 vote following her nomination by President Joe Biden in March. The Columbia Law School professor is the youngest person to ever lead the Commission and is already making waves as she prepares an agenda to reshape the priorities of the FTC and reclaim powers that the agency relinquished four decades ago.

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August 1, 2021 0 comment
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The Do’s and Don’ts of Launching an App
Direct SellingFeaturesNewsSpecial Report

The Do’s and Don’ts of Launching an App

Best practices for utilizing new app technology to capture a modernized market

By:  Jena Lang Warford
You can try to get around having a good app by having a mobile responsive website, but it just comes down to the fact that while not all new technology is good, all good technology isn’t old. —Damian Mobley, Executive Director of Technology, MONAT
Apps can now support this livestream shopping for customers, with individualized links for each Distributor to be credited for purchases. —McKinley Oswald, President of Global Sales, Verb Technology
In a relationship business, is it really necessary to have an app—is that what distributors expect?  According to a Mary Meeker report, Americans are spending 5.6 hours a day on the internet, and 3.6 hours of that is on their mobile devices. With eMarketer asserting that 88 percent of mobile device time is spent within apps rather than within a browser, it makes sense for direct sales companies to invest in app technology.  To develop a successful app, executives need to ask themselves three questions, according to Damian Mobley, MONAT’s executive director of technology. “First, will the app serve a purpose that isn’t already being satisfactorily met; that is, are you replacing something inferior? Next, do the people want the functions you’re planning to offer? And finally, can you roll it out effectively?”

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July 1, 2021 0 comment
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Direct Selling Critics, Old and New, Join Regulators at Caustic 2-Day Conference
Cover StoryDirect SellingFeatures

Direct Selling Critics, Old and New, Join Regulators at Caustic 2-Day Conference

Organizers block channel representatives from contributing

By:  David Bland
There were a number of factors that led us to think that the timing was right for this type of conference, including indications from the Federal Trade Commission that they are tightening focus on the MLM industry. —Douglas M. Brooks, Attorney
Anti-MLM influencers appear to be more interested in fostering a cottage industry of their own than they are to an inclusionary dialogue on how best to promote entrepreneurship. —Direct Selling Association
For decades, direct selling’s opponents have worked to challenge the channel from the relatively confined spaces within their respective legal, academic and media circles.  The occasional high-profile court case would generate publicity for a few news cycles, and newspaper and magazine articles would follow with passing coverage. 

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June 1, 2021 0 comment
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ComplianceLegalRisk Roundup

FTC Maintains Pressure on Compensation Plans

Direct sales companies should prepare for a new wave of regulatory actions

By:  Brent Kugler, Guest Contributor
Companies should take the time to consider if their plans hit the guardrails laid out by the most recent statements and actions of regulators.
Like it or not, the legal requirements for multi-level-marketing (MLM) compensation structures have changed in recent years. Many existing comp plans used by direct selling companies for years may now, if challenged, be considered non-compliant by the Federal Trade Commission (FTC). Indeed, comp plans considered to be compliant as recently as two years ago may today run afoul of the FTC’s latest criteria for evaluating compensation structures.

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March 1, 2021 0 comment
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