Meenakumari, S.
Multilevel marketing in India: Need for a comprehensive legal framework - Kashmir Journal of Legal Studies - 10(1), Jul, 2023: p.161-174
This paper discusses the relevance of multilevel marketing in the modern economy and articulates the need for its comprehensive legal regulation to protect the interest of consumers. Multi-level marketing (MLM) commonly referred to as network marketing has been adopted by direct selling companies since 1920s and is still in demand and common among the public due to its execution in the sale of multiple number of quality products that is available in the market today. Among the several direct selling companies in India, Amway India is one of the major notable global direct selling companies with wide range of quality products. Though, this marketing strategy is considered legitimate all over the globe and carried out like any other typical business pattern, still it undergoes a major shortcoming regarding its legality and functioning. Recently, many scams and frauds involved in such business model are increasing through several illegal schemes like pyramid frauds, money circulation schemes, ponzi schemes, etc. Certain specific legal frameworks have been enacted by the government to combat these scams that are getting common in such business model. Despite all the laws regulating these illegal schemes, there is no such MLM oriented legislations to regulate these companies and the MLM business model. The implementation of new Consumer Protection (Direct Selling) Rules, 2021 with special features in addition to the Direct Selling Guidelines, 2016 can to a certain extent effectively regulate the direct selling entities and the direct sellers engaged in network marketing. Yet in 2022 when the Enforcement Directorate attached assets worth crores of rupees from Amway accusing it of running a multilevel marketing scam, the question came to limelight whether the existing laws are ineffective to regulate these scams?- Reproduced
http://kashmirjournaloflegalstudies.edu.in// b481-4e09-8ecf-05057a46ed5d.pdf
Multilevel marketing in India: Need for a comprehensive legal framework - Kashmir Journal of Legal Studies - 10(1), Jul, 2023: p.161-174
This paper discusses the relevance of multilevel marketing in the modern economy and articulates the need for its comprehensive legal regulation to protect the interest of consumers. Multi-level marketing (MLM) commonly referred to as network marketing has been adopted by direct selling companies since 1920s and is still in demand and common among the public due to its execution in the sale of multiple number of quality products that is available in the market today. Among the several direct selling companies in India, Amway India is one of the major notable global direct selling companies with wide range of quality products. Though, this marketing strategy is considered legitimate all over the globe and carried out like any other typical business pattern, still it undergoes a major shortcoming regarding its legality and functioning. Recently, many scams and frauds involved in such business model are increasing through several illegal schemes like pyramid frauds, money circulation schemes, ponzi schemes, etc. Certain specific legal frameworks have been enacted by the government to combat these scams that are getting common in such business model. Despite all the laws regulating these illegal schemes, there is no such MLM oriented legislations to regulate these companies and the MLM business model. The implementation of new Consumer Protection (Direct Selling) Rules, 2021 with special features in addition to the Direct Selling Guidelines, 2016 can to a certain extent effectively regulate the direct selling entities and the direct sellers engaged in network marketing. Yet in 2022 when the Enforcement Directorate attached assets worth crores of rupees from Amway accusing it of running a multilevel marketing scam, the question came to limelight whether the existing laws are ineffective to regulate these scams?- Reproduced
http://kashmirjournaloflegalstudies.edu.in// b481-4e09-8ecf-05057a46ed5d.pdf