Multilevel Marketing Regulatory Act

FYI, this is an excerpt of Law 7 / 1996 of January 15 of the Retail Trade with respect to multilevel.

T? CHAPTER II.

SALES PROMOTION ACTIVITIES.

CAP? CHAPTER I.

GENERAL.

Article 22. Multilevel marketing. Writing according to Law 29/2009 of 30 December.

1. The multilevel marketing is a special form of trade in which a manufacturer or wholesaler sells its goods or services through a network of dealers and / or independent sales agents, but coordinated within a commercial network and whose economic benefits are obtained by a single margin on the retail price, which is distributed through the collection of variable percentages of the total turnover generated by all the vendors included in the network business, and business as the volume of each component been created. For purposes of this article, merchants and independent sales agents will be considered in all cases the expected impact entrepreneurs in the text of the General Law for the Protection of Consumers and Users and other complementary laws.

2. It is prohibited to organize the marketing of goods and services when:

1. Constitutes an unfair act with consumers as provided in Article 26 of Law 3 / 1991 of January 10, Unfair Competition.

2. Not adequately ensure that distributors have the appropriate labor contract or comply with the requirements that are legally required for the development of a business.

3. There is a requirement for a minimum purchase of products distributed by the new vendors without repurchase under the same conditions.

4. In no event will the manufacturer or wholesaler holder of the network may restrict access to the same to the payment of a fee or entry fee which is not equivalent to the products and promotional material, information or training delivered at a price similar to other homologous on the market and shall not exceed the amount determined by regulation.

In cases where there is a repurchase agreement, the products will have to admit to a refund if your state does not clearly prevent commercialization.

Article 23. Prohibition of Pyramid Sales. Writing according to Law 29/2009 of 30 December.

Pyramid selling practices are those set out in Article 24 of Law 3 / 1991 of January 10, Unfair Competition, to be null and void contract terms contrary to the provisions of that provision. These are:

... Article 24 of Law 3 / 1991. Pyramid selling practices.

It is considered unfair misleading in any circumstances, create, manage or promote a pyramid selling scheme in which the consumer or user makes a payment in exchange for the opportunity to receive compensation that is derived primarily from the introduction of other consumers or users the plan, and not from the sale or supply of goods or services.