Complaint
The FTC filed a complaint on March 25, 1975, alleging five counts of violating Section 5 of the Federal Trade Commission Act:
- Count I of the complaint alleged that Amway engaged in resale price maintenance.
- Count II alleged that Amway allocated customers among distributors and restricted the distributors' source of supply as well as the retail outlets through which they may resell;
- Count III alleged that Amway restricted the distributors' advertising.
- Count IV alleged that Amway misrepresented that substantial income may be obtained from geometrical increases in the number of distributors in the chain recruiting operation of the Amway distribution plan.
- Count V alleged that Amway misrepresented the profitability of a distributorship and the potential for recruiting new distributors and failed to disclose the substantial business expense involved and the high turnover of distributors.
Oral arguments were heard on June 6, 1978.
Read more about this topic: In Re Amway Corp.
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