MILLAR KREKLEWETZ LLP is a boutique Canadian law firm with lawyers who have significant expertise in Competition Law matters, particularly the application of the Multi-Level Marketing (MLM) and Pyramid Scheme provisions of the Competition Act.

The following is a short introduction to our Competition Law services.

Competition Law

Sections 55 and 55.1 of the Competition Act contain specific provisions directed at MLM and to schemes of pyramid selling. These provisions require that:

1.          No representations as to compensation may be made to prospective participants by a MLM company or its independent sales consultants (“ISCs”) (eg., in any of the corporate documents, at meetings, or on websites etc.), unless the earnings of a “typical participant” are also disclosed;

2.          There can be no head hunting or recruitment fees;

3.          There can be no purchase requirement in order to qualify, maintain or advance in the marketing plan save that the purchase of a demonstration/sample/starter kit may be required provided that it is sold at the seller’s cost price and for the purpose of facilitating sales; 

4.          There can be no inventory loading (i.e., it is prohibited to knowingly supply products to a ISCs in an amount that is commercially unreasonable);

5.          There also has to be “commercially reasonable” buy back policy that is available to all participants.

Millar Kreklewetz LLP has significant experience in reviewing and revising MLM/direct selling company documents (including Policies and Procedures; Compensation Plans, ISC Agreements and marketing materials) to ensure that they are in compliance with the Competition Act.

Millar Kreklewetz LLP also has significant expertise in drafting Written Opinion requests to the Competition Bureau, which are required in order to obtain the requisite direct selling licences from various provinces.

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