Luca Biffaro, Francesco Paolo Russo

Pyramid promotional schemes and consumer protection (Jel: D180)

  • Abstract

Informations and abstract

Keywords: consumer protection, unfair commercial practices, pyramid promotion schemes, multilevel marketing systems, compensation plan.

This article offers an in-depth analysis of the issue of pyramid promotional schemes, as it has been recently prompted by public enforcement activity of the Italian Antitrust Authority. As a result of the recent developments in European and national consumer protection law, this kind of economic activity is always considered an unfair commercial practice, and because of that prohibited by art. 23, par. 1, let. p), Codice del Consumo. The practical application of the aforesaid ban has led the Italian Antitrust Authority to make a significant hermeneutic effort in order to identify when undertakings' behavior fall inside the scope of application of the prohibition. In particular, starting from the specific criteria adopted by the Italian Antitrust Authority in its decisions, the authors attempt to complement the analysis, extending it to the field of multilevel marketing systems. In this vein, we consider utmost necessary to highlight the differences between, on the one hand, this lawful type of business activity and, on the other, prohibited pyramid promotional schemes, in order to avoid an overlapping risk.

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