What Is MLM Advertising?

Online MLM and traditional MLM are twins. Traditional MLM is illegal and has been closely watched and severely cracked down by the industrial and commercial departments. Network MLM uses a secret, non-public method, and its profit method is also to pay membership fees (or enjoy the product), and then pull people into it as its own downline, so fabricated, this method has no essence with traditional MLM The difference.

Internet MLM

Chinese name: Internet MLM
is it legal: illegal

Homogeneous: Traditional MLM
Responsible unit: Business sector

Introduction to MLM

Online MLM and MLM are almost like using the Internet to carry out MLM. Usually there is a website of their own. By pulling people to join, people pull people and then pull off the line. The more you pull, the more you earn. This is a variant of traditional MLM, because The membership fee is low, but with a large number of people, the development will also be rapid. Taking advantage of the people's love of money, it is actually a kidnapping and extortion gang.

Do everything possible to get you out of your pocket to give them to them, and then become one of them. Deceive your friends and relatives. Many graduates have fallen into this mire in today's society. Many families are distressed by these matters, and they are increasingly valued and regulated by government departments, such as the business sector.

Network MLM

Physical marketing

This is the "online version" of traditional MLM. It promotes physical products through the Internet and develops offline. But this model is too blatant and has been gradually abandoned.

MLM ad clicks

The other is to increase the click-through rate of advertisements by offline members to give commission returns, earn points by browsing paid advertisements on the Internet, and develop from a single click advertisement to click advertisements, send and receive email, and register online. This kind of online registration is mostly free and not much found in our country, but it poses a great threat to maintaining the security of personal information on the Internet and preventing the harassment of spam.

mlm Network MLM mode

It is also the so-called multi-level information network marketing (mlm) model that we found the most and investigated the most. Case: In the case of using the website of Beijing Eurasia International Business Co., Ltd. seized by the inspection team of the Kunshan Industry and Commerce Bureau, the MLM method adopted by the parties is a typical MLM model. The MLM carrier is the website of Beijing Eurasia International Business Co., Ltd. This website provides nine platforms for promotion: corporate planning, personal finance, distance education, training, merchants, promotional services, information services, 60mb space, management control center You can apply for a user name after paying RMB 1300, and you can use the nine platforms provided by the website for 5 years. Moreover, after successfully joining the website, you can be eligible to recommend and develop others to join the website, and you can earn points based on the number of people who have successfully joined the recommendation.

The specific rule is that the membership development offline includes two consumer areas, left and right. Both left and right branches must be developed, and the development ratio of the left and right branches should be 1: 2 or 2: 1. For group), it is effective. You can accumulate 6 points after developing the first group, and get a bonus of 600 yuan accordingly; you can get a bonus of 450 yuan for each group of 2-10, and 350 for each group. After the development to the 100th group, each group can get a bonus of 300 yuan, and the maximum prize amount of each member is 35,000 yuan per week. By analogy, offline members develop members in a certain proportion.

In this case, pulling the head replaced the traditional way of selling goods, but the essence is still the membership fee paid below to pay the bonus on the line, which is a typical pyramid-type pyramid scheme.

Internet MLM Advertising Commission

Recently, online "cloud advertising" has prevailed, and thus illegal organizations have used the concept of cloud advertising for illegal pyramid schemes. Due to the hidden and deceptive nature of online MLM, it is difficult for the majority of netizens to distinguish. Most people only think it is online earning or advertising space. In addition, the popularity of advertisements on the Internet has increased the rent of advertising space. Illegal organizations use this background to propose a new model of "commission" by spending money on advertising space and then pulling offline to buy advertising space.

Moreover, many organizations use relatively well-known companies or fee correction platforms, such as Alipay and Tenpay, for publicity and confusion, and use the psychological development of netizens to believe that legitimate websites are offline.

Because of the rapid spread of the Internet, such organizations often quickly gain a lot of profits and quickly escape. Website IP generally uses large foreign agents, which also makes it difficult for the police to investigate and deal with it. Remind the netizens to pay attention, distinguish carefully, and ask relevant professionals.

MLM related laws

The combination of MLM and the Internet has produced many characteristics that are different from traditional laws and regulations, and the current legislation does not give a clear definition of MLM and gives the industry and commerce department an effective means of investigation. By 2013, the Ministry of Commerce is working with the State Administration for Industry and Commerce to start drafting the Direct Selling Law. The core of the legislation is to distinguish between direct selling and various forms of MLM. We hope that in this law, network MLM will be clearly defined and the corresponding law enforcement powers will be given to the industry and commerce departments. The aim is to effectively combat online fraud and maintain network security and order.

Regulations for the Management of Internet MLM

The Regulations on the Prohibition of MLM have been adopted at the 101st Executive Meeting of the State Council on August 10, 2005, and will be implemented as of November 1, 2005.

Criminal crackdown on MLM

Since 2008, illegal activities such as "pulling people 'heads" and collecting "entry fees" have occurred frequently, seriously disrupting social order and affecting social stability. The Legislative Affairs Office of the State Council, the Ministry of Public Security, and the State Administration for Industry and Commerce have proposed that in order to better combat the crime of organizing pyramid schemes, special provisions should be made in the criminal law for the crime of organizing and leading the practice of pyramid schemes.

On February 28, 2009, the Seventh Session of the Standing Committee of the Eleventh National People's Congress passed the "Amendment to the Criminal Law of the People's Republic of China (7)" by adding one after Article 224 of the Criminal Law as the 222nd One of Article 14: "Organization and leadership, in the name of business activities such as selling goods and providing services, require participants to obtain qualifications by paying fees or purchasing goods and services, and form a hierarchy in a certain order, directly or indirectly. If the number of development personnel is used as the basis for remuneration or rebates, and the participants are enticed or coerced to continue developing others to participate, defraud property, or disrupt the economic and social order of MLM activities, they shall be sentenced to fixed-term imprisonment or imprisonment for less than five years and fined; More than five years in prison and fines. "

Internet MLM Crime Features

Network MLM Virtuality

The Internet is a virtual space. Illegal MLMs use the characteristics of the Internet and use the names of high-tech and e-commerce to cover their eyes and engage in karate. In the above case, the members get only the virtual network space (the so-called e-commerce package, which is just renting the company's server space). From the MLM traditional physical products to purely for the purpose of developing members to get bonuses, some paid The methods are all online payment, completely "e-commerce".

Internet MLM Deception

Using a website as a MLM platform is more deceptive and hidden than traditional MLM. Many of these MLM websites are attractive under the banner of distance education, training of individual entrepreneurship, and e-commerce, covering people's eyes and eyes, and concealing the nature of their members (downline) for profit. In the Beijing Eurasia Albert MLM case, the collected data show that Beijing Eurasia Albert International Co., Ltd. uses the high-tech to develop MLM under the guise of developing domestic e-commerce and promoting the development of the information industry. Listed on the company's website are corporate planning, personal finance, distance education, training, merchants, publicity services, information services, 60mb space, management control center and other sections. From wording to slogans are very tempting and deceptive. Many offline personnel do not have the ability to judge, thinking that this is e-commerce. After being captured, they have repeatedly emphasized that they are not participating in MLM but a new type of consumption.

Network MLM concealment

Compared with traditional MLM, network MLM is more concealed. The development of members is carried out on the network. Members must join the MLM through the website, and the user names used are all pseudonyms or codes, and all have their own login passwords. The contact between them is mainly through email or instant messaging tools ( icq) to complete. In addition, the website requires that all remittances be transferred by bank transfer, which avoids the need to meet offline and online in traditional MLM. The operator changes from bright to dark and hides behind the scenes. After the line is seized by the law enforcement department, You can also escape immediately when you go online. Since the development of members is only reflected on the Internet, and members maintain a single-line contact on MLM methods, when the industry and commerce department investigates, it is impossible to verify the true information of the company's website and the true identity of the members. It is almost impossible to track down the line.

Cross -regional network MLM

Internet communication has a cross-regional nature, making MLM break through the limits of regional and national borders, even in one country, it is blooming everywhere. However, due to the limitation of territorial jurisdiction, local industrial and commercial departments can only supervise MLM activities in their respective jurisdictions, and national MLM cannot be cut off from the source. The backbone of MLM personnel is often to "shoot one place for another place." We commit crimes all over the country. We can only capture the local leaders and "keep one party safe." But we cannot do anything to destroy the entire MLM group. At the same time, there are also many difficulties in investigating and obtaining evidence. For multinational network MLM, because the website is registered in a foreign country and there is no business registration agency in the country, it faces the problems of law application and international jurisdiction. Moreover, it is difficult to rely on the strength of only one country to effectively combat it. It requires the concerted efforts of the international community. However, countries nowadays have mixed opinions on MLM, and it is extremely difficult to achieve unanimous legal standards.

Passive investigation and punishment of network MLM

There are so many online resources that it is not easy for industrial and commercial departments to find clues about illegal MLM among hundreds of millions of information. What's more, MLM websites can only log in by registered users entering their passwords. General users cannot browse their content, and website management is not within the scope of industry and commerce supervision. Therefore, the industry and commerce department cannot actively supervise suspicious websites according to their powers. Only when the MLM traces or reports are found in the attack, there are few channels to obtain the source information of the case, which makes the industrial M & A investigation and punishment network MLM extremely passive.

Online MLM Investigation

On July 28, 2014, the Anhui Provincial Police cracked a cross-provincial online MLM case involving more than 100 million yuan, involving 27 provinces across the country, with a total of more than 20,000 members. ^[1]

Internet MLM Cases Return

On March 6, 2014, the Public Security Bureau of Quzhou City, Anhui Province, according to reports from the masses, filed an investigation into the "Chinese Direct 123" online MLM case. After investigation, the website does not have any product sales, and the bonus is calculated based on the number of recommended members. Subsequently, the Ministry of Public Security initiated a cluster campaign and deployed the public security organs of the country involved in the case to centrally investigate and deal with the MLM organization. ^[1]

Illegal methods of network MLM

The police found that the "Chinese Direct 123" website required membership fees when recruiting members. After payment, the website will give the purchaser a member number and a member "nickname", and the purchaser will officially become a website member. After becoming a member, you can freely develop offline, collect commissions, and form a higher-level relationship between the five and five copies. It is reported that each new member must pay a minimum of 1,000 yuan. ^[1]

External MLM Views

Li Bailing, deputy head of the Economic Investigation Corps of the Anhui Provincial Public Security Department, said that the methods of network MLM activities are changeable, the expansion speed is accelerated, the concealment and deceit are further enhanced, and the harm is getting more serious. At the same time, the trend of compounding MLM crime is becoming more and more obvious. Many MLM activities only use MLM as a means, which is essentially engaging in criminal activities such as illegal fundraising and fraud. At the same time, it is accompanied by other serious violent criminal acts such as illegal detention and intentional injury. ^[1]

Development Status of Online MLM

In August 2018, it was learned from authoritative departments such as the Ministry of Public Security, the State Administration of Market Supervision and Administration, the People's Bank of China, and Internet companies such as Tencent that MLM activities have become increasingly networked, and new types of online MLM crimes have caused property and property damage to more and more ordinary people. Violation of life. It is worth noting that online MLM campaigns also target criminal groups with the elderly, and millions of "silver-haired" people have become the biggest victims. ^[2]

Internet MLM Latest News

In November 2019, the Baohe Branch of the Public Security Bureau of Hefei City, Anhui Province detected a network pyramid scheme. The company involved has developed more than 30,000 members with sales of nearly 500 million yuan. According to police investigations, the "Life Energy Solution" involved false publicity to induce consumers, and the company's operating model was an illegal pyramid scheme. Police have adopted criminal coercive measures against a total of 9 former heads of the Chinese-funded Chuanglian Company, company executives and the head of the marketing team, and Yan Moyue, the actual controller of the Chinese-funded Chuanglian company, went online to flee. ^[3]