mandateB

MandateB refers to a German legislative provision passed in 2010 aimed at reforming the regulation of multi-level marketing (MLM) companies operating within the country. Specifically, the provision mandated that all companies engaged in multi-level marketing disclose their compensation structures to their sales agents and clearly distinguish their products from traditional advertising.

According to the provisions, MLM companies are required to clearly state the distinctions between sellers' roles as independent contractors and their employment status within the company. This legislative move aimed to prevent pyramid scheme-like operations and to protect consumers from deceptive marketing tactics.

Under the mandate, companies with more than 2,000 sales agents are required to submit an annual report detailing their revenue and spending patterns. These transparency requirements are seen as a means to monitor and deter aggressive sales tactics, and to prevent the exploitation of low-income individuals.

Additionally, the mandate set forth guidelines for commission rates, rebates, and bonuses paid to sales agents. Companies are further required to establish tangible product-specific value, allowing for differentiation from and clarification of affiliate commissions.

The law aims to strengthen the distance between business providers and consultants or direct sellers in Germany. Complaint investigations and companies' compliance reviews were ordered directly by theGerman Federal Cartel Office as a while restructuring local regulatory structure