Docome Life Co, Ltd.

1157th Commissioners' Meeting (2013)

Case:

Docome Life violated the Fair Trade Law while engaging in multi-level marketing practices

Key Word(s):

Multi-level marketing, business inspection

Reference:

Fair Trade Commission Decision of January 8, 2014 (the 1157th Commissioners' Meeting); Disposition Kung Ch'u Tzu No.102212

Industry:

Direct Selling Establishments (4872)

Relevant Law(s):

Article 22 of the Supervisory Regulations Governing Multilevel Sales

Summary:

The FTC performed a business inspection at the main office of a multi-level marketing business, Docome Life Co., Ltd. (hereinafter referred to as Docome Life) on April 3, 2013. The FTC found that the company did not keep any records of monthly business development from January 2012 to March 2013 in its main office. The conduct was in violation of Article 22 of the Supervisory Regulations Governing Multilevel Sales.

Findings of the FTC after investigation:

The business inspection conducted by the FTC revealed that Docome Life also did not keep at its main office member distributor applications and contracts, information on return of products by participants, and the total rebates disbursed between January 2012 and March 2013. The information was to be recorded on a monthly basis as required by the law. The company made corrections and submitted the records for January to April 2012 on April 16, 2013. As for the partial records for May 2012 to March 2013, Docome Life claimed that the company stopped its multi-level marketing business in May 2012 and therefore could not provide such information. However, the FTC's Disposition Kung Ch'u Tzu No.101162 dated November 8, 2012, Docome Life's business revenue statement and income tax statement (Form 401) for the period from May 2012 to June 24 2013, and Taipei City Government Department of Health Bei-Shi-Yi-Hu-Zi Sanction Decision No. 10233964301 dated June 24, 2013 and Bei-Shi-Yi-Hu-Zi Sanction Decision No. 10233983903 dated July 24 the same year all indicated that Docome Life was still engaging in its multi-level marketing operations during that period. Apparently, that the company did not operate its multi-level marketing business after May 2012 was a false excuse.

Grounds for disposition:

(1) When conducting the business inspection on Docome Life, the FTC found that Docome Life did not keep at its main office member distributor applications and contracts, information on return of products by participants, and the total rebates disbursed between January 2012 and March 2013. According to the law, the information was to be recorded on a monthly basis.

(2) Docome Life provided the statutorily required documents for January to April 2012 but claimed that the company stopped its multi-level marketing business in May and therefore could not provide the information for May 2012 to Mach 2013. However, the investigation made by the FTC proved that the company was still engaging in its multi-level marketing business after May 2012. Therefore, its failure to keep such information at its main office as required by the law was obvious.

(3) Based on the above reasons, the FTC concluded that Docome Life, a multi-level marketing business, had violated Article 22 of the Supervisory Regulations Governing Multilevel Sales enacted in accordance with Article 23-4 of the Fair Trade Law for failing to keep at its main office records of business development on a monthly basis and therefore imposed on the company an administrative fine of NT$200,000.

Appendix:
Docome Life Co., Ltd.'s Uniform Invoice Number: 24287139

Summarized by Lin, Yen-Kuang; Supervised by Yang, Hsiu-Yun

! : For information of translation, click here

(1)	When conducting the business inspection on Docome Life, the FTC found that Docome Life did not keep at its main office member distributor applications and contracts, information on return of products by participants, and the total rebates disbursed between January 2012 and March 2013. According to the law, the information was to be recorded on a monthly basis.
(2)	Docome Life provided the statutorily required documents for January to April 2012 but claimed that the company stopped its multi-level marketing business in May and therefore could not provide the information for May 2012 to Mach 2013. However, the investigation made by the FTC proved that the company was still engaging in its multi-level marketing business after May 2012. Therefore, its failure to keep such information at its main office as required by the law was obvious.
(3)	Based on the above reasons, the FTC concluded that Docome Life, a multi-level marketing business, had violated Article 22 of the Supervisory Regulations Governing Multilevel Sales enacted in accordance with Article 23-4 of the Fair Trade Law for failing to keep at its main office records of business development on a monthly basis and therefore imposed on the company an administrative fine of NT$200,000.