Brief introduction of the case

Case handling organ: Zhangzhou Bureau of Industry and Commerce, Fujian Province

Punishment time: 12 January 2017

Result of punishment: ordering the parties to correct their illegal acts and imposing a fine of 30,000 yuan

Focus of Dispute in Handling Cases

[Direct Report Network BeijingDecember 21st] (China Business News Network)When investigating and handling this case, the investigators have three different opinions on this case: first, the violation of the law is minor and can be corrected orally without punishment; second, according to the provisions of Article 8 of the Regulations on Establishment of Service Networks in Direct Selling Industry of the Ministry of Commerce, the acts of the parties should be punished in accordance with Article 39 of the Regulations on Direct Selling Management; third, the acts of the parties violate the Regulations on Direct Selling Management; and third, the acts of the parties Article 11 of the Regulations on Sales Administration shall be punished in accordance with Article 41 of the Regulations on Direct Sales Administration.

After research, the case handlers adopted the third opinion for three main reasons.

First, the establishment and change of service outlets are the prerequisite and necessary condition for direct selling enterprises to carry out business. Direct selling enterprises must set up branches in the provincial administrative regions to be engaged in direct selling activities to take charge of business activities. The prerequisite for establishing branches is to set up networks in the administrative regions at the district (county) level in order to meet the needs of consumers and direct sellers to understand product prices, return and exchange system and other services provided by enterprises according to law. Therefore, service network is the most grass-roots unit of direct marketing enterprises, which is directly responsible for the branches and gives the most direct support to the business of the branches. It is the fixed place where consumers can easily access and understand the products. Its existence has played a positive role for direct salesmen to carry out business and consumers to understand commodities more comprehensively.

Secondly, standardizing service network is the grasp of law enforcement departments to regulate direct selling enterprises. Direct selling mode has no fixed location, and "face-to-face" sale from direct sellers to consumers is a complex act on the basis of entrustment, which includes entrustment and agency, trademark authorization, sale, intermediary and so on. It is easy to cause irregularities or even illegal acts. If there are hidden dangers, such as not having the qualifications of direct sellers (agency behavior), selling counterfeit and inferior products (trademark authorization behavior), price fraud (trading behavior), false exaggeration (intermediary behavior), and the characteristics of decentralization of direct sellers, it is difficult for consumers to safeguard their rights, and it is also difficult for law enforcement departments to supervise.

Direct selling enterprises can eliminate most of the hidden dangers by setting up service outlets with complete functions. Direct selling enterprises can publicize the Regulations on Direct Selling Management, the Regulations on Prohibiting Pyramid Selling and the relevant laws and regulations through service outlets, publicize the basic information such as the operating qualification of direct selling enterprises and the list of direct selling personnel and direct selling trainers, express the performance, price and return system of commodities, accept consumer complaints, assume the functions of returning and changing goods by consumers, distinguishing the authenticity of commodities and guaranteeing the authenticity of prices. To understand the company's basic situation, salary system and safeguard legitimate rights and interests, it is convenient for law enforcement departments to solve the regulatory difficulties arising from the strong liquidity of direct selling behavior.

Third, clarify the application of law according to the circumstances of the case. Article 8 of the Regulations on the Establishment of Service Networks in Direct Selling Industries stipulates that "Those who violate the provisions of these Measures shall be punished in accordance with Article 39 of the Regulations on Direct Selling Administration." The case handlers believe that the provisions of this law are too principled, and that the case handlers should punish according to the provisions of Article 41 of the Regulations on Direct Selling Management in accordance with the principle of "superior law is superior to inferior law", and be practical and realistic, and excessive punishment is equivalent.