(1) administrative law
Definition of 1.MLM
In 2005, the State Council promulgated the MLM Prohibition Ordinance. Article 2 defines MLM as: "It refers to the behavior of organizers or operators to develop personnel, calculate and pay remuneration to the developed personnel based on the number of personnel or sales performance directly or indirectly developed by them, or ask the developed personnel to obtain the qualification to join on the condition of paying a certain fee, seek illegal interests, disrupt economic order and affect social stability."
2. Specific behaviors of pyramid selling-"recruiting people", "income gate fee" and "paying by team"
Article 7 of the MLM Prohibition Ordinance clearly defines three behaviors as pyramid schemes, namely soliciting customers' heads, collecting entrance fees and paying team fees, and resolutely bans them. The specific provisions are as follows:
"The following acts belong to pyramid schemes:
(1) The organizer or operator, through the development of personnel, requires the developed personnel to develop other personnel to join, and calculates and pays remuneration (including material rewards and other economic benefits, the same below) to the developed personnel based on the number of personnel directly or indirectly developed, so as to seek illegal benefits;
(2) The organizer or business operator, through the development personnel, requires the developed personnel to pay the fees or pay the fees in disguised form by subscribing for commodities, etc. , so as to obtain the qualification to join or develop other personnel to join and seek illegal interests;
(3) The organizer or business operator requires the developed personnel to develop other personnel to join, thus forming an online relationship, and calculating and paying online rewards according to the sales performance of offline personnel to seek illegal benefits. "
(2) criminal law
The Criminal Law Amendment (VII) in 2009 stipulated the crime of organizing and leading pyramid selling activities (hereinafter referred to as "pyramid selling crime"). "In the name of business activities such as selling goods and providing services, organizations and leaders require participants to obtain the qualification to join by paying fees or purchasing goods and services, and form a hierarchy in a certain order, directly or indirectly based on the number of people who develop, inducing and coercing participants to continue to develop others' participation. If the circumstances are serious, he shall be sentenced to fixed-term imprisonment of not less than five years and fined. "
In 20 13, the Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public Security jointly issued the Opinions on Several Issues Concerning the Application of Laws in Handling Criminal Cases of Organizing and Leading MLM Activities (hereinafter referred to as the Opinions), which clarified the levels and numbers of MLM organizations, namely, the concepts of "more than 30 people in the organization participated in MLM activities" and "more than three levels".
Strictly speaking, regular WeChat business practitioners, as the main body of e-commerce, should be regulated by the E-commerce Law. In 20 18, it thrived due to the rise of Taobao Hangzhou e-commerce circle, and set foot in the "Gathering Micro Store" and the snack e-commerce platform "Global Catcher" in the WeChat ecosystem, which was officially banned by Tencent for alleged pyramid schemes. These e-commerce companies are under the slogan of "mass entrepreneurship, innovation" and "making money by playing mobile phones", but their operation content is a new type of pyramid scheme based on multi-layer distribution system and widely promoted, which is illegal. In recent years, the country has constantly standardized the field of e-commerce and cracked down on pyramid schemes, which is also the key reason for the "thunderstorm" of WeChat business in recent years. As an industry giant of WeChat business, Darway Company is suspected of pyramid selling, which inevitably makes people re-examine and further reflect on the legitimacy of WeChat business.
(A) the business behavior characteristics of WeChat merchants
1. Spread widely and get quick results.
With the popularity of smart phones and the rapid development of internet plus, WeChat and friends circle have become a common way for people to communicate. The number of domestic WeChat users is high, which gives full play to everyone's circle effect-WeChat merchants publish a dynamic in his circle of friends, attracting every WeChat friend to watch or forward it, which has a wide spread and quick effect, and maximizes the cluster effect and group communication speed.
2. Convenient operation and low popularization cost. On WeChat, it is very convenient to push messages, whether it is a circle of friends or a public platform. From pushing to individuals, to specific business operations and follow-up contacts, all links can usually be carried out smoothly on smart phones; The promotion cost is also very low. As long as a mobile phone and an ID card are basically operated by one button, only the information cost is needed for the promoters, which greatly reduces the promotion cost and contact cost.
3. Loose supervision and imperfect standard system. Wechat is a free and open platform, and the real-name registration system has not been implemented. Users can change their nicknames or register multiple accounts at any time. However, due to its convenient and flexible operation, as the social software with the largest number of users in China, it is impossible to distinguish individual users from the business entities behind them, which means that the business behavior on WeChat is difficult to be regulated by the traditional business behavior. In addition, China's network supervision system is still in the process of construction and improvement, and the lack of special supervision means has also caused its loose supervision.
(2) Identification of the boundary between legal business behavior and pyramid selling behavior of WeChat merchants.
To identify the legitimate business and pyramid schemes in WeChat business, we need to comment on the following points.
1.MLM is often a business model, and it is necessary to distinguish the agency level and develop others offline.
Because the business behavior of WeChat merchants has the above characteristics, the circle of friends of WeChat merchants is prone to pyramid schemes. Most WeChat business operators unconsciously pass on their "sales ideas" to their relatives and friends in the course of business, trying to develop these people into team members. In other words, some WeChat business teams have specific business models and need to distinguish between different levels and agents, because different levels have different rebate ratios, and some agents have begun to continuously develop others to join the team in order to improve their own level. In addition, the closed promotion of WeChat business also leads to the need for WeChat business to expand customers and improve profits through multi-level business models. However, on the basis of multi-level business model, there is a legal risk of pyramid selling by constantly developing others and rewarding the developers on the basis of their direct or indirect rolling number.
2.MLM usually includes hoarding goods and becoming an agent out of pocket.
Take Dalway Company as an example. Although Dalway has the slogan of "zero joining fee", it doesn't seem to meet the requirements of paying the membership fee in pyramid schemes. But in fact, many agents have their own consumption and hoarding behavior in order to maintain the sales qualification and commission ratio, that is, they become agents from their own pockets, which is undoubtedly another form of entrance fee.
3. One of the main sources of income of pyramid selling is to obtain agency rebates according to other people's goods.
The profit model of WeChat business, whether the salary source of WeChat business operators is formal or not, is the key to judge legal marketing and pyramid schemes. If a member's sales performance mainly depends on "off-line" hoarding goods, fission, saving money by himself, and the source of salary is also rebate according to the fission degree, it is suspected of pyramid schemes. The Opinions also clarified the definition of "team-paid" MLM activities: the organizers or leaders of MLM activities, through the development of personnel, require the developed MLM personnel to develop other personnel to join, form an online and offline relationship, and calculate and pay online rewards according to offline sales performance to seek illegal benefits, which belongs to "team-paid" MLM activities.
According to related news reports, David's agent who participated in pyramid schemes described the development model of the company's internal sales staff. After buying a product of 2500 yuan, the company can't get the commission, and needs to continuously develop "offline" to make money; Spend 300,000 yuan to become the "chairman", form your own team and family, and earn money from "children and grandchildren" ... This sales method is actually to distinguish the agent level, develop the offline, smash the group to hoard goods (entrance fee), and earn offline money with rebates (reward method). Therefore, David's business behavior basically conforms to the three pyramid schemes prohibited by the Regulations on the Prohibition of MLM, which is also the key to this investigation.
(C) the difference between operating pyramid selling and fraudulent pyramid selling
In response to Darvi's alleged pyramid scheme, members of the relevant investigation team said in an interview: "From the current investigation, this pyramid scheme is a kind of operational pyramid scheme, and the operational pyramid scheme is not enough to constitute fraudulent pyramid schemes at present. With the further investigation of the case, if he has fraudulent pyramid schemes, we will transfer them to the public security organs according to law. " Among them, how to distinguish between operational pyramid schemes and fraudulent pyramid schemes needs further discussion.
There is no word "defrauding property" in the definition of pyramid selling in the Regulations on Prohibiting MLM promulgated by the State Council, but the Opinions clearly stipulates that "in the name of selling goods, providing services and other business activities, participants are required to obtain the qualification to join by paying fees or purchasing goods and services, and a hierarchy is formed in a certain order, and the number of development personnel is directly or indirectly used as the basis for remuneration or rebate. Lure or coerce participants to continue to develop pyramid schemes in which others participate, defraud property and disrupt economic and social order. If there are more than 30 people involved in pyramid schemes within the organization and the level is above the third level, the organizers and leaders shall be investigated for criminal responsibility. " Compared with the definition of pyramid selling in the two documents, fraudulent pyramid selling has the characteristics of "attracting people", "paying membership fees" and "paying fees" in the sense of administrative violation, and it also requires pyramid selling to have the characteristics of luring and coercing participants to continue to develop others' participation and defrauding property; As a result, the economic and social order was disturbed to a serious extent, and there were more than 30 people involved in pyramid selling activities within the organization, with the level above the third level.
Regarding the determination of "defrauding property", the Opinions also clearly stipulates that if the organizers and leaders of pyramid selling activities fabricate and distort national policies, fabricate and exaggerate business, investment, service projects and profit prospects, cover up the true source of remuneration and kickbacks, or adopt other fraudulent means, they shall be deemed as fraud. Whether the personnel involved in pyramid schemes think that they have been cheated does not affect the identification of fraudulent property. Simple "team payment" pyramid selling activities aimed at selling goods and based on sales performance are not treated as crimes. MLM activities in the form of "team remuneration", but in essence based on the number of developers or rebates, shall be convicted and punished for organizing and leading MLM activities in accordance with the provisions of Article 224-1 of the Criminal Law.
The distinction between commercial pyramid schemes and fraudulent pyramid schemes is also the key to the trend of this incident. As the above-mentioned case-handling personnel said, with the further investigation of the case, if fraud and pyramid schemes are committed, they will be transferred to the public security organs according to law. Article 224 of the Criminal Law stipulates the crime of organizing and leading pyramid selling activities, and its protection objects include not only citizens' property ownership, but also market economic order and social management order. If it is found that the company established in Zhang Ting has the behavior of "luring and coercing participants to continue to develop others" and "defrauding property", which violates the provisions of Article 224 of the Criminal Law. If the circumstances are serious, the organization leader will face the statutory maximum penalty of 15 years' imprisonment.
(D) the difference between pyramid selling and direct selling
The public's question is that Amway (a health care brand) and Mary Kay (a beauty brand) introduced from the United States a few years ago have also been promoted offline in many places in China. Why are these operators not suspected of "pyramid selling"? This requires distinguishing between direct selling and pyramid selling.
In 2005, the State Council also promulgated the Regulations on Direct Selling Management and the Regulations on Prohibiting MLM. Among them, the Regulations on Direct Selling Management defines single-level direct selling as direct selling and allows it to develop in an orderly manner under strict supervision. In other words, it is legal for independent marketers to directly sell products and services to consumers through face-to-face explanation and demonstration in places other than fixed retail stores (such as personal residence, workplace or others). The most fundamental criteria to distinguish pyramid selling from direct selling are three elements: attraction, admission fee and payment method. At the same time, those suspected of fraudulent pyramid schemes need to see whether there are "serious" harmful consequences such as "fraud and inducement". Therefore, after 20 18, a large number of business entities such as Amway and Mary Kay obtained business licenses issued by the Ministry of Commerce and adopted the "direct sales" model according to law. Therefore, even the early offline promotion activities are essentially different from "MLM" in legality.
(1) WeChat business operators
1. Seriously study relevant laws and regulations and make regular rectification and self-inspection.
Wechat business operators should strictly abide by the e-commerce law, advertising law, consumer protection law, WeChat operation order and other relevant norms, pay taxes according to law, and must not make inappropriate comments, abuse market dominance, exclude or restrict competition, strictly control quality and safety, and protect the legitimate rights and interests of consumers. Operators should regularly check and rectify, maintain the sensitivity of norms, and protect the good operating environment of network e-commerce.
2. Change the promotion mode, multi-platform and multi-dimensional promotion.
Wechat business operators should promote it in multiple platforms and dimensions, take the road of social marketing, and avoid hoarding goods, buying and selling themselves, using acquaintances to attract people and developing offline. Under the background of the Internet, operators should fully tap the advantages of the network, and return to the real "seller identity" by opening micro-stores, bringing goods into the platform or live broadcasting and promoting cooperation, instead of "self-stocking and self-selling". Only by returning to the business essence and trading identity of the operator can we better operate in compliance.
3. Strictly regulate business access behavior.
Article 10 of the "Electronic Commerce Law" stipulates that e-commerce operators shall register market entities according to law. However, unless individuals sell their own agricultural and sideline products and household handicraft products, individuals do not need to obtain permission according to law, nor do they need to register according to laws and administrative regulations. To sum up, WeChat merchants are strictly e-commerce business entities and should be regulated by the E-Commerce Law. Judging from the current trading experience of WeChat business, the amount (tens of yuan, hundreds of yuan) of products directly purchased by WeChat business operators can almost be classified as small transactions. From this point of view, it seems to be in line with the convenience of labor activities and sporadic small transactions without permission. However, since there are no relevant regulations on whether WeChat business operators need to register, from the perspective of strictly regulating business access behavior, at the beginning of entering the market, operators should take the initiative to inquire whether it is necessary to fulfill their registration obligations from the platform and relevant industrial and commercial administrative departments, and take the initiative to inquire about relevant business policies from regulatory authorities or relevant websites to prevent problems before they happen.
4. Correct mentality and correct understanding of business methods and concepts.
The reason why WeChat business has developed rapidly in the past few years lies in brainwashing people to make more money and make more money, thus attracting a large number of people to join the WeChat business team. At the same time, there are also unsold goods, and they hoard their own money for the so-called "rebate", resulting in no money at all, but instead pay money. Therefore, managers should set a correct attitude, establish a correct view of money and business philosophy, and operate in good faith in a diligent, legal and more objective way.
(2) Enterprises in WeChat business
1. Establish compliance system and optimize business plan. Enterprises should take adequate measures to build a compliance system, optimize business plans, personnel access, payment methods and other factors, resolutely curb pyramid schemes such as "attracting people" and "joining fees", and do a good job in risk prevention and control from the top structure.
2. Fulfill corporate responsibilities and strengthen employee training. Enterprises should fulfill their corporate and social responsibilities, pay attention to high-frequency risk points, and focus on explanations. In particular, we should strengthen legal education for WeChat business practitioners in tax payment, advertising, network order, anti-pyramid schemes, product quality and so on. In order to make them realize the legal responsibility of engaging in WeChat business, make training records and pay attention to testing the training effect.
3. Strengthen the double control and audit inside and outside the enterprise. In many cases involving pyramid schemes, these electronic data containing hierarchical information or promotional materials containing hierarchical distribution models will become key conviction evidence. Therefore, after designing different levels of incentive models involving distribution, if necessary, we should consult the local market supervision and management department to determine its legitimacy, or be appraised by professional criminal lawyers. Although pyramid selling is a high-risk crime faced by social e-commerce platform at this stage, other criminal risks faced by enterprises can not be ignored, such as illegal business operation, illegal absorption of public deposits, crimes related to intellectual property infringement, tax crimes, corruption crimes and so on. In addition, cross-border e-commerce may also face the risk of smuggling ordinary goods or violating overseas criminal laws. Therefore, in order to effectively prevent, enterprises should strengthen internal control, pay attention to the construction of the overall compliance management system, and carry out special compliance according to the business types and characteristics of enterprises.
(3) platform.
1. Due diligence and perfect supervision
E-commerce platform should fulfill the obligation of reasonable care: firstly, do due diligence on the background of operators who apply to enter the platform to sell goods or provide services, and complete the pre-entry investigation through the proof of the other party's no criminal record and the promise of rewards and punishments. In addition, through the big data killing method, the high-frequency risks that may be involved in WeChat business, such as pyramid schemes, tax evasion, fraud, unfair competition and other illegal activities, are screened and supervised, forming an all-weather, all-season and all-year killing mode to ensure the comprehensiveness and effectiveness of supervision; Here, the platform should verify and register the identity, address, contact information and other information of the above-mentioned operators, establish registration files, and update them regularly to achieve comprehensive and perfect supervision.
2. Build a platform compliance system and fulfill the obligation of information disclosure.
The establishment and publicity of the platform compliance system is an important part of the compliance culture of e-commerce enterprises. In the compliance system, a very key part is the formulation and operation of the platform service agreement and trading rules, which is not only the proof of the platform's own standardized operation, but also the institutional basis for standardizing operators and users. According to the "Electronic Commerce Law", e-commerce platforms should formulate platform service agreements and trading rules, and should continue to publicize them in a prominent position on their home pages to ensure that operators and consumers can read and download them conveniently and completely. If the platform service agreement and trading rules are modified, opinions shall be publicly solicited in a prominent position on the homepage, and reasonable measures shall be taken to ensure that relevant parties can fully express their opinions in time. In addition, the compliance system should also include personnel, finance, market and other aspects and links. The e-commerce platform should refine each module, fulfill the obligation of information disclosure, and let the operators fully know.
3. Strictly standardize the identification and fulfill the obligation of information recording and preservation.
According to Article 31 of the Electronic Commerce Law, platform transaction information shall be recorded and kept for not less than three years. The information object it stores is "information on goods and services and transaction information published on the platform". It can be seen that the platform should strictly standardize the logo, record and save the records of at least the last three years, and ensure the integrity, confidentiality and availability of information, which is not only the guarantee for consumers' consumption safety, but also the embodiment of the legitimate operation of the platform.
4. Fully cooperate and take the initiative to report
(4) the government.
1. Clarify legal rules and constantly improve legislation. Through various guides, explanations and demonstration cases, the rules are clarified and refined to improve the transparency of legal rules. At the same time, timely revise relevant laws and regulations, constantly improve supporting legislation, and encourage compliance operations such as e-commerce to prevent problems before they occur.
2. Strengthen market supervision. As early as 2065 438+07 12 10, the State Council's notice (II) on printing and distributing the "Thirteenth Five-Year Plan for Market Supervision" clearly pointed out that it is necessary to strengthen market supervision in key areas, crack down on pyramid selling and standardize direct selling. Through the implementation of safe construction and evaluation of national civilized cities, we will strengthen the responsibilities of governments at all levels, strengthen the linkage of law enforcement among departments, carry out special rectification in key areas, and intensify efforts to crack down on pyramid schemes. Strengthen the investigation and punishment of online pyramid schemes to curb the spread of online pyramid schemes. Strengthen the research and judgment of new pyramid schemes under the guise of "WeChat business", "e-commerce" and "consumer investment" under the new situation, strengthen risk early warning and prevention, strengthen case publicity and education, and improve the public's ability to identify and prevent pyramid schemes. Strengthen the supervision of direct selling enterprises, promote the standardized operation of enterprises, and investigate and deal with direct selling violations according to law.
3. Establish information sharing mechanism and dynamic management. The network is also a public place, so it is necessary to establish an online communication channel between the business platform and the government's traffic management, so as to provide a legal basis for the government's network control department to strengthen the supervision of e-commerce industries such as WeChat commerce.
5. Strengthen rights protection in the field of new consumption. Standardize new consumption areas such as e-commerce and WeChat business, strengthen legal responsibilities such as e-commerce platforms, social platforms and search engines, crack down on acts that infringe on consumers' rights and interests, such as counterfeiting and selling fake goods and false online propaganda, purify the online commodity market, and implement a seven-day unreasonable return system for goods sold by internet, television, telephone and mail order. Strengthen the legal and social responsibilities of telecom operators and virtual operator, and severely punish illegal enterprises that use channels and number resources for fraud. Strengthen the protection of consumers' personal information and increase penalties for illegally selling, providing or obtaining consumers' personal information.
As the People's Daily commented, in a society ruled by law, there is no room for illegally drilling "secrets", and the legal umbrella only protects the operation of law-abiding duties. Whether individuals or enterprises, don't be eager for quick success and instant benefit, take chances, establish a correct business philosophy and money concept, respect market rules, respect public order and good customs, and operate legally and legally. Only one step at a time, whether individuals or enterprises, will maximize their own value and maintain the stable, healthy and orderly development of China's economy!
Author: Liang Mingzhen