Kung Yan Shih No. 33: Meaning of "their" in Article 23 of the Fair Trade Law and calculation of participants' economic interest
Case:
Kung Yan Shih No. 33: Meaning of "their" in Article 23 of the Fair Trade Law and calculation of participants' economic interest
Keywords:
multi-level sales, introductions
Reference:
Fair Trade Commission Decision of July 22, 1992 (the 42nd Commissioners' Meeting); (81) Kung Ts'an Tzu No. 952
Relevant Laws:
Article 23 of the Fair Trade Law
Summary:
1. Request for explanation The following issues were raised in a letter to the Fair Trade Commission (the Commission): (1). Article 23 of the Fair Trade Law provides that "multi-level sales shall not be conducted if the participants thereof receive commissions, bonuses, or other economic benefit primarily from introducing others to participate, rather than from their [ch'i] marketing or sale of the goods or services at reasonable market prices." Does the word "their" [ch'i] refer only to the participant, or does it include the participant and the line [of participants] below him in the organization? Should commissions and bonuses be calculated solely on the reasonable market price of the goods on which the participant sells himself, or can the reasonable market price of the goods sold by the participant and the sales representatives in the line below that participant be included in the total? (2) Is it legal to evaluate the participants' economic interest primarily on the joint sales performance of the participant himself and the "sales representatives in the line below" the participant?
2. The Commission explained that: The word "their" in Article 23 of the Fair Trade Law refers to the participants-i.e. participants as defined in Article 2(3) of the Supervisory Regulations Governing Multi-Level Sales. When income from participant commissions, bonuses, and other economic benefits is calculated, the calculation should be evaluated based on the actual sales or promotion of goods at reasonable market prices by participants. Actual sales of goods by sales representatives in the line below [the participant] may be included in the total if the participant provided substantive guidance to those sales representatives on how to market or sell goods. Summarized by Kuo An Chi ; Supervised by Lin Ching-Tarng