multi-level marketing
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Global Verge wins $43 million lawsuit against mystery MVNO Zer01
When we first heard about Zer01 it was set to launch at a time when other MVNOs were disappearing. (Remember Amp'd Mobile, or Helio?) Zer01 was pledging unlimited voice and data for just $69.99 a month, before most other carriers had their $99 plans, but ultimately never delivered a thing. Apparently Global Verge was similarly left in the dark, but unlike the rest of us it had invested $170,000 in Zer01 in exchange for selling wireless services as part of its multi-level marketing company. Global Verge had been allowing its "e-associates" (people who pay for the right to hawk Global Verge's wares) to shill for Zer01 wireless, which of course never delivered a single call. There are accusations flying fast and frantic about which of the two companies is the worst offender here, but the District Court in Clark County, Nevada at least believes that it's Zer01 reneging on its promises, awarding $43 million to Global Verge for breach of contract and various other legal wrongdoings. Congrats, GV, and good luck collecting.
LGJ: Dawn at the Great Pyramid (Scheme)
Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: [Photo by exothermic] GDC 2010 has come and gone, but many of the discussions I had with various developers, publishers, attorneys and other great attendees have actually left me with some curious issues to explore with you here on LGJ. The first such issue is one that actually relates to the long-known (but always fuzzy) area of the law that deals with multi-level marketing systems, the more legitimate cousin of what are commonly known as "pyramid schemes." These are the slightly more legitimate looking cousin of the Ponzi scheme (most recently in the news because of Madoff), but nonetheless create a "business model" doomed to fail. Accordingly, there are statutes in nearly all 50 states and in many countries barring these types of arrangements. But why is this relevant to gaming at all? The advent of the referral model picked up by many social and online games is the potential problem area, and while the model itself may not suffer the same faults as a traditional pyramid scheme, it could nonetheless violate the laws in that area. After all, those laws don't contemplate digital goods, which can suffer no scarcity and basically no cost to product.
