Each direct selling company has its own rules about what distributors can say and do on the internet. It is common for MLM companies to closely guard their trademark(s) and the company has the right to regulate the usage of all of their media, whether it appears in print or online.
At the very least, MLM companies are expected to regulate the advertising being made by consultants.
The internet has opened up incredible opportunities for both MLM companies and distributors. However, at the same time, MLM companies often wrestle with these opportunities. For instance, some MLM companies will provide a location on their homepage for distributors; some will require a link from the distributors’ homepage to the company’s main website. And, in some cases, direct selling companies won’t allow distributors to promote the company’s product or opportunity (compensation plan) on the internet at all. There are two reasons for this. If the company name appears on each distributor’s homepage then search engine results will produce thousands of “hits” on distributors’ websites instead of the company’s homepage. Amid the thousands of searches, MLM companies may be concerned that people won’t be able to find the company’s homepage.
The other reason a MLM company may not want distributors advertising their marketing materials online is because direct selling companies are concerned about statements that are made about earnings claims (how much distributors are told they will earn) and unauthorized product claims (what distributors claim the company’s products can and cannot do). Earnings claims and unauthorized product claims that have been made by distributors in the past have threatened the MLM business, as well as both the MLM company and distributors. Many government agencies (FTC, FDA, etc.) hold the MLM company responsible for any statements made by its distributors. At the very least, MLM companies are expected to regulate the advertising being made by consultants.
For more information about earnings claims, unauthorized product claims and consultant advertising/marketing restrictions, please visit the following links:
Earnings Claims and Consumer Protection Laws Video
The Difference Between MLM Earnings Calculators and Earnings Claims Video
FDA Notification for Permissible Structure/Function Claims for Dietary Supplements
New Video: Earnings Claims and Consumer Protection Laws
MLM Company and Distributor Training on the Direct Selling Industry
Why do companies restrict the type of advertising carried on by their distributors?
Distributor Training – Two Common Questions
New Video – Unauthorized Medical Claims and FDA Issues
FDA to Issue Revised NDI Guidance – Nutraceuticals World Reports
Nutritional Supplements, Health Claims and MLM
As a consultant, what can I say about a MLM company’s nutritional/dietary supplement products?
Why do companies restrict the type of advertising carried on by their distributors?
Interview with Expert MLM Attorney – How to Handle Compliance Discussions with your Distributors
If I’m an independent contractor, why are there rules regarding my conduct?
The Educated Networker: Trademarks and Network Marketing
Nutritional Supplements, Health Claims and MLM
For more information, visit our websites at www.mlmlegal.com and www.mlmattorney.com. Or, visit our blogs at http://mlmlegal.com/MLMBlog/ and http://mlmattorney.com/blog/.
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And, as always, visit MLMLegal.com, the best MLM resource on the web. The next Starting and Running the Successful MLM Company Conference will be here before you know it! On May 16th and 17th, 2013 we are hosting the MLM Conference for the 25th year! This is now our 64th annual conference (held almost consistently three times per year over the last 24 years). All executives/owners of MLM, direct selling, network marking, and party plan companies are welcome to attend. This is the original MLM Startup Conference, hosted and perfected by direct selling industry expert, MLM Attorney Jeff Babener. Call 503-226-6600 or 800-231-2162 to register. (Can’t make this event? Keep an eye out for our October and February conferences as well.)