Hierarchical, MLM Network Marketing Banned

Admin   |   20 February, 2015   |   1132   |   3980

Manama, The Minister of Industry and Commerce today issued edict 2/2015, banning hierarchical and network marketing. Increasing consumers' complaints about such business practices have prompted the ministry to issue the ban.

"Hierarchical and network marketing flouts rules and regulations, particularly the law on consumer protection", said Consumer Protection Director Senan Ali Al-Jabery. The concept of hierarchical and network marketing consists in convincing a person to buy a product and then persuade others to purchase the item which allows the chain to expand. The first buyer obtains more commissions in case he integrates more members into his network and increases the volume of sales.

Al-Jabery said that some companies adopting such operations have been contacted and urged to correct their activities and adhere to the ministerial edict. The Bahrain Chamber of Commerce and Industry has also been approached to direct the trading sector to comply with the ban and instruct hotels and hall-renting companies not to allow meetings that promote these two marketing practices at their venues.

"The ministry has started taking administrative and legal measures to ensure compliance with the ban", Al-Jabery said, calling upon consumers to cooperate. In a statement today, he announced that the ministry will take the required procedures in cooperation with concerned bodies at the General Directorate of Anti-corruption and Economic and Electronic Security to stop such marketing practices. Violations can be reported via hotline 17007003, email Consumer_protection@moic.gov.bh or the ministry’s twitter and Instagram accounts.