As you may remember, a petition brought on behalf of John Hutton, the Secretary of State for Business, Enterprise and Regulatory Reform, was seeking to close Amway in the UK, in the “public interest”.
The Government accused Amway of several illegal and inappropriate business practices and threatened to shut them down there. Some of these practices include (in my terms) price gouging, misrepresentation of a business opportunity (easy money with no effort), only a handful of IBO's were earning a bonus (allegedly only 6% were earning 95% of the income!), etc.
According to the London Times, "Mark Cunningham, QC, on behalf of the
Government, had told the court that Amway's promise that agents could make
"substantial financial rewards" amounted to "selling a dream".
He said that the company operated a "pernicious" scheme which encourages
agents to recruit family, friends and colleagues to the group so that they
themselves can move up to that "very narrow group that makes any money".
He said that the Amway scheme involved targeting the "gullible
"deluded" and "vulnerable" to joint he scheme and accused it of "dream selling".
Mr Justice Norris accepted that the company's "radical" new business model - adopted after the Government threatened legal action ".
These "radical" new practices include (hey, don't these sound familiar? I believe a Mr. Woodward and Mr. Brady attempted to get these implemented for years at AmQuix!):
1. Price reduction - bring prices in line with other retailers. Actually make the product marketable in the consumer maketplace! Imagine that.....
2. Proper representation of the opportunity - provide an opportunity where people can actually make money rather than line the pockets of just a few.
Per the Times, "the company had to give several legal undertakings including not to recruit further sales agents until it had publishing details of their average earnings and to scrap its annual charge to register as a distributor." (OUCH)
So it appears Amway won't technically get shut down in the UK, but most experts would agree they've been extremely hindered, and they are scared to death of these same restrictions and practices being forced upon them in other countries.
All eyes now turn to gov't agencies in other countries. Since the UK had the courage to stand up to this giant and impose these reforms (basically take them out of their 50 year old business model), will other countries have the same courage to protect their citizens from the same outlandish treatment?
Time will tell..... One thing is for sure, the Amway business will never look the same again in the UK!
