BurnLounge Ruling in FTC Case Seen as Good for Herbalife
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BurnLounge Inc., a digital music seller shut down by the Federal Trade Commission over its multilevel marketing, was found by a federal appeals court to be an illegal pyramid scheme in a case closely followed by Herbalife Ltd. watchers.
The U.S. Court of Appeals in San Francisco ruled today that the company’s marketing methods violated the Federal Trade Commission Act because its distributors paid for the right to sell products and were motivated primarily by payments from the company for recruiting new members.