Actually no one owns the downline. Distributors enter into an individual contract with the company. Inherent in the contract is the company’s agreement to pay overrides on the downline sales organization of the distributor. However, downlines are people and no one owns people. On the other hand, companies provide distributors with computer printouts and genealogical reports, which the companies view as proprietary and confidential. Companies do expect that distributors will not use printouts to solicit for other opportunities, or to conduct mass mailings or in any other way utilize computer printouts to compete.
The question of “rights in the downline” is one which is clearly headed for the courts within the next few years. Many MLM companies take the position that they are the sole owners of “downlines.” Many key distributors market their “downline structures” from one MLM company to another as if downline structure was a piece of property which could be marketed at will. When the “process” of multilevel, as a form of marketing is closely examined, the better argument is probably that neither of these positions is correct. Continue reading