January 18, 2018
Partner John Villafranco
was quoted in the Natural Products Insider
article “Multi-Level Marketers Gain Pyramid Scheme Resource in FTC Guidance.” The article discusses the recently published business guidance for multi-level marketers (MLMs) of nutritional supplements and other products by the Federal Trade Commission (FTC). Many of the principles set forth in the guidance are reflected in a stipulated order for a permanent injunction and monetary relief involving Herbalife.
John, who represented Herbalife in negotiating its agreement with the FTC said, “Responsible companies in this space need to just pause and assess, step back and have a look at what you’re doing. There’s no company out there that if they do that wouldn’t find a way to improve their operations [and] decrease their risk.” In a recent blog post, John stated that the 2018 guidance “essentially establishes safe harbors, and if you can conform your practices to that guidance, you’re not going to have any issue with the Federal Trade Commission.”
Even with the FTC’s guidance, it is still difficult to completely assess the risks facing multi-level marketers because of the uncertainty over enforcement in the Trump administration. “We know what the precedent says and we know what the … current staff believes, but we don’t really know what the Federal Trade Commission under President Trump is going to believe or assert,” John said.
To read the full article, please click here