The Competition Bureau: Achieving positive written opinions for
multi-level marketers
Canada's legal system imposes severe civil and criminal
penalties on multi-level marketing (MLM) plans that fail to follow
the law. Illegitimate businesses face the potential of paying
unlimited fines, and individuals may face imprisonment. In light of
the severe consequences faced, and the demand for market certainty,
section 124.1 of the Competition Act enables MLM operators
to apply to the Competition Bureau for a
binding written opinion on the legitimacy of the plan
presented.
Considering the legality of an MLM business
When considering the legality of a business, the Competition
Bureau looks to sections 55 and 55.1 of the Competition
Act. These two sections delineate the differences between
legitimate MLM plans and illegal pyramid schemes. As a general
rule, legitimate plans focus on the sale of products, whereas
illegitimate schemes focus on the recruitment of people and
